Rubicon Technology Annual Report 2021

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______Commission file number 00133834RUBICON TECHNOLOGY, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware364419301(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. Employer Identification No.)900 East Green StreetBensenville, Illinois60106(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code: (847)2957000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $.001 per sharePreferred Shares Purchase RightsThe NASDAQ Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 ofthe Exchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☐Smaller reporting company☒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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No ☒As of June 30, 2021, there were 2,008,720 shares of common stock outstanding held by nonaffiliates of the registrant, with an aggregate market value of thecommon stock (based upon the closing price of these shares on the NASDAQ Capital Market) of approximately $19,082,840.The number of shares of the registrant’s common stock outstanding as of the close of business on February 28, 2022 was 2,446,652.Documents incorporated by reference:Portions of the Registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report onForm 10K provided, that if such Proxy Statement is not filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed no later than the end of such 120day period.TABLE OF CONTENTSItem of Form 10KPagePart I11.Business21A.Risk Factors41B.Unresolved Staff Comments112.Properties113.Legal Proceedings114.Mine Safety Disclosures11Part II125.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities126.[Reserved]127.Management’s Discussion and Analysis of Financial Condition and Results of Operations127A.Quantitative and Qualitative Disclosure About Market Risk238.Consolidated Financial Statements and Supplementary Data239.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures239A.Controls and Procedures239B.Other Information249C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections24Part III2510.Directors, Executive Officers and Corporate Governance2511.Executive Compensation2512.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters2513.Certain Relationships and Related Transactions, and Director Independence2614.Principal Accountant Fees and Services26Part IV2715.Exhibits and Consolidated Financial Statement Schedules27Signatures28Exhibit Index29iPART IAll statements, other than statements of historical facts, included in this Annual Report on Form 10K including statements regarding our estimates,expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans andobjectives of management for future operations may be “forwardlooking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We have based these forwardlooking statements on our current expectations and projections about future events and financialtrends that we believe may affect our financial condition, results of operations, business strategy, shortterm and longterm business operations and objectives andfinancial needs. These forwardlooking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,”“estimate,” “expect,” “forecast,” “prospects,” “goals,” “potential,” “likely,” and the like, and/or futuretense or conditional constructions such as “will,” “may,”“could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends oroperating results also constitute forwardlooking statements.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forwardlooking statements we may make. Before investing in our common stock, investors should be aware that theoccurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could have a material adverseeffect on our business, results of operations and financial condition. These risks and uncertainties include the adoption of sapphire as a material in newapplications, our successful development and the market’s acceptance of new products; our ability to sell certain underutilized assets, and the prices we receivetherefor; our ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; our ability to effectively utilize netoperating loss carryforwards; dependence on key customers; our ability to secure new business and retain customers; changes in demand or the average sellingprices of sapphire products; the failure to achieve the margins we expect, whether due to our own operations or changes in the market for our products; our abilityto successfully qualify our products with customers and potential customers; potential disruptions in our supply of electricity; changes in our product mix; theoutcome of the testing of new products and processes or the testing of our existing products for new applications; the failure of third parties performing services forus to do so successfully; our ability to protect our intellectual property rights; the competitive environment; and the cost of compliance with environmentalstandards. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, forwardlooking statements are inherently subjectto known and unknown risks, including business, economic and other risks and uncertainties that may cause actual results to be materially different from thosediscussed in these forwardlooking statements. Readers are urged not to place undue reliance on these forwardlooking statements, which speak only as of the dateof this Annual Report. We assume no obligation to update any forwardlooking statements in order to reflect any event or circumstance that may arise after the dateof this Annual Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlyingassumptions prove incorrect, our actual results may vary materially from those expected or projected.You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission(the “SEC”) as exhibits with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially differentfrom what we expect.Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc. and our consolidated subsidiaries. 1ITEM 1. BUSINESS OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia and it wascompleted in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology(Malaysia) SDN BHD.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date and time to be taken and comein easy to use perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.”SAPPHIRE INDUSTRY OVERVIEWSapphire is utilized in optical and industrial applications. It is used for windows and optics for aerospace, sensor, medical, semiconductor, instrumentation,electronics and laser applications due to its wideband transmission, superior strength, chemical and scratch resistance and high strengthtoweight ratio. PRODUCTS We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.These optical sapphire products are qualified and used in equipment for a wide variety of end markets and high performance applications, including defense andaerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical and laser applications.RESEARCH AND DEVELOPMENTIn 2021 and 2020, Rubicon did not incur any research and development (“R&D”) expenses and it currently does not have any plans for expenditures in 2022related to R&D.2SALES AND MARKETINGWe market and sell through our direct sales force to customers. Our direct sales team includes experienced and technically sophisticated sales professionals andengineers who are knowledgeable in the development, manufacturing and use of sapphire windows and other optical materials.A key component of our marketing strategy is developing and maintaining strong relationships with our customers. We achieve this by working closely withour customers to optimize our products for their production processes. We believe that maintaining close relationships with our customers’ senior management andproviding technical support improves customer satisfaction.CUSTOMERSOur principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. A substantial portion of our sales have been to asmall number of customers. In 2021, our top three customers (each 10% or greater of our revenues) accounted for, in the aggregate, approximately 46% of ourrevenue from our continuing operations and in 2020, the top four customers accounted for approximately 55% of our revenue from our continuing operations.Although we are attempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers.However, we also expect that our significant customers may change from time to time. No other customer accounted for 10% or more of our sapphire revenuesduring 2021 or 2020 other than those referred to above.INTELLECTUAL PROPERTYWe rely primarily upon a combination of knowhow, patents, trade secret laws and nondisclosure agreements with employees, customers and potentialcustomers to protect our intellectual property. However, we believe that factors such as the technological and innovative abilities of our personnel, the success ofour ongoing product development efforts and our efforts to maintain trade secret protection are more important than patents in maintaining our competitive position.COMPETITIONThe markets for highquality sapphire products are very competitive and have been characterized by rapid technological change. The products we sell mustmeet certain demanding requirements to succeed in the marketplace. Although we are a wellestablished sapphire provider, we face significant competition fromother established providers of similar products as well as from new and potential entrants into our markets.ENVIRONMENTAL REGULATIONIn our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of federal, state and locallaws regulating the discharge of these materials into the environment or otherwise relating to the protection of the environment. These include statutory andregulatory provisions under which we are responsible for the management of hazardous materials we use and the disposition of hazardous wastes resulting from ourmanufacturing processes. Failure to comply with such provisions, whether intentional or inadvertent, could result in fines and other liabilities to the government orthird parties, injunctions requiring us to suspend or curtail operations or other remedies, which could have a material adverse effect on our business. The cost ofcomplying with environmental regulation is not material. EMPLOYEESAs of December 31, 2021, we had 13 fulltime employees. None of our employees are represented by a labor union. We consider our employee relations to begood.3OTHER INFORMATIONYou may access, free of charge, our reports filed with the SEC (for example, our Annual Reports on Form 10K, our Quarterly Reports on Form 10Q and ourCurrent Reports on Form 8K and any amendments to those forms) over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy anydocument we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1800SEC0330 for further information onthe public reference room. Our SEC filings are also available through our Internet website (www.rubicontechnology.com). Reports filed with or furnished to the SECwill be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Alternatively, if you would like a paper copy of any such SECreport (without exhibits) or document, write to Investor Relations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of suchrequested document will be provided to you, free of charge. The information found on our website is not part of this or any other report filed with or furnished to theSEC.ITEM 1A. RISK FACTORSYou should carefully read the risk factors set forth below, together with the financial statements, related notes and other information contained in thisAnnual Report on Form 10K. Our business is subject to a number of important risks and uncertainties, some of which are described below. The risks describedbelow, however, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial mayalso impair our business operations. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cashflows. Please refer to the discussion of “forwardlooking statements” on page one of this Annual Report on Form 10K in connection with your consideration ofthe risk factors and other important factors that may affect future results described below.We have incurred significant losses in prior periods and may incur losses in the future.We have incurred significant losses in prior periods and may incur significant losses in the future. These losses may have an adverse effect on our ability toattract new customers or retain existing customers. We have incurred net losses of $0.7 million, $1.1 million, $1.1 million, $17.8 million and $62.9 million in 2021, 2020,2019, 2017 and 2016, respectively. Although we recorded net income of $963,000 in 2018, there can be no assurance that we will achieve profitability in future periods.We are exploring, evaluating and have begun implementing certain strategic alternatives with a goal of providing greater value to our stockholders. There can beno assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternativewill yield additional value for stockholders.Our management and Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. Thesealternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling thebusiness, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potentialacquisitions or recapitalizations, in one or more transactions.There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that anytransaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management anddisruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could beadversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, willprovide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a numberof factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonableterms. 4We may acquire other businesses, products or technologies; if we do, we may be unable to integrate them with our business effectively or at all, which mayadversely affect our business, financial condition and operating results.If we find appropriate opportunities and have adequate funding, we may acquire other businesses, product lines or technologies. However, if we acquire abusiness, product line or technology, the process of integration may produce unforeseen operating difficulties and expenditures and may absorb significantattention of our management that would otherwise be available for the ongoing development of our business. Further, the acquisition of a business may result in theassumption of unknown liabilities or create risks with respect to our existing relationships with suppliers and customers. If we make acquisitions, we may issueshares of stock that dilute other stockholders, expend cash, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangibleassets, any of which may adversely affect our business, financial condition or operating results.If we are unable to raise additional capital when needed, we may not be able to execute the acquisition of other businesses.We may require additional capital to fund operations, capital expenditures and or the acquisition of other businesses. We may finance future cash needsthrough public or private equity offerings, debt financings, corporate collaborations or licensing arrangements. Additional funds may not be available when we needthem on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of ouracquisition opportunities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution, and debt financing, ifavailable, may involve restrictive covenants. To the extent that we raise additional funds through corporate collaborations or licensing arrangements, it may benecessary to relinquish some rights to our technologies or our new products, or grant licenses on terms that may not be favorable to us. We may seek to access thepublic or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.We believe our existing cash, cash equivalents and shortterm investments and interest thereon, will be sufficient to fund our projected operating requirementsfor at least the next twelve months. However, if our success in generating sufficient operating cash flow or our use of cash in the next twelve months were tosignificantly adversely change, we may not have enough funds available to continue operating at our current level in future periods. A limitation of funds availablemay raise concerns about our ability to continue to operate. Such concerns may limit our ability to obtain financing and some customers may not be willing to dobusiness with us.Rubicon Technology WorldwideWe rely on third parties for certain material and finishing steps for our products, including the slicing and polishing of our sapphire crystal.In order to reduce product costs and improve cash flow, we use third parties for certain material and finishing functions for our products, including the slicingand polishing of our sapphire crystal inventory. These types of services are only available from a limited number of third parties. Our ability to successfullyoutsource these finishing functions will substantially depend on our ability to develop, maintain and expand our strategic relationship with these third parties. Anyimpairment in our relationships with the third parties performing these functions, in the absence of a timely and satisfactory alternative arrangement, could have amaterial adverse effect on our business, results of operations, cash flow and financial condition. In addition, we do not control any of these third parties or theoperation of their facilities, and we may not be able to adequately manage and oversee the third parties performing our finishing functions. Accordingly, anydifficulties encountered by these third parties that result in product defects, delays or defaults on their contractual commitments to us could adversely affect ourbusiness, financial condition and results of operations. In addition, their facilities may be vulnerable to damage or interruption from natural disasters, inclementweather conditions, power loss, acts of terrorism and similar events. A decision to close a facility without adequate notice as a result of these or other unanticipatedproblems at the facility could result in lengthy interruptions in their services to us; and any loss or interruption of these services could significantly increase ourexpenses, cause us to default on our obligations to our customers and/or otherwise adversely affect our business. Furthermore, the outsourcing of our finishingsteps, such as slicing and polishing of wafers, may not continue to be available at reasonable prices or on commercially reasonable terms, or at all. 5Our gross margins could fluctuate as a result of changes in our product mix and other factors, which may adversely impact our operating results.We anticipate that our gross margins will fluctuate from period to period as a result of the mix of products that we sell in any given period. We are working toincrease sales of higher margin products, introduce new differentiated products and lower our costs. There can be no assurance that we will be successful inimproving our gross margin mix. If we are not successful, our overall gross margin levels and operating results in future periods would continue to be adverselyimpacted. Increased competition and the adoption of alternatives to our products, more complex engineering requirements, lower demand and other factors may leadto a further downward shift in our product margins, leading to price erosion and lower revenues for us in the future.The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established and better capitalizedthan we are.The markets for selling highquality sapphire products are very competitive and have been characterized by rapid technological change. This competition couldresult in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of, market share or expectedmarket share, any of which would likely seriously harm our business, operating results and financial condition. The average selling prices of sapphire products have historically been volatile and in recent years sapphire product prices have been increasingly depressed.Historically, our industry has experienced volatility in product demand and pricing. However, in the last five years, the sales prices for our sapphire productshave trended downward due to an oversupply of products in the market. In some countries, government programs support sapphire producers who wouldotherwise be unprofitable; in such circumstances, sapphire may be sold at prices below cost for an extended period of time, depressing market prices, to thedetriment of our gross margins. This has had a significant adverse impact on our profitability and our results of operations. Moreover, changes in average sellingprices of our products as a result of competitive pricing pressures increased sales discounts and new product introductions by our competitors could have asignificant impact on our profitability. Although we attempt to optimize our product mix, introduce new products, reduce manufacturing costs and pass along certainincreases in costs to our customers in order to lessen the effect of decreases in selling prices, we may not be able to successfully do so in a timely manner or at all,and our results of operations and business may be harmed.Our future operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results for particularperiods to fall below expectations.Our revenues and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations are due to a number of factors, manyof which are beyond our control. In connection with the Board of Directors’ continuing review of alternatives with a goal of providing greater value to ourstockholders, the Board decided to limit our business focus to the optical and industrial sapphire markets and to exit the LED and mobile device markets. The opticaland industrial sapphire markets are smaller markets than our historical undertakings and there is no assurance that we will be able to successfully expand our opticaland industrial sapphire business, or that such shift in focus will ultimately improve our profitability or operating results.We depend on a few customers for a major portion of our sales and our results of operations would be adversely impacted if they reduce their order volumes.Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. In2021, our top three customers accounted for, in the aggregate, approximately 46% of our revenue from our continuing operations, and in 2020, our top fourcustomers accounted for approximately 55% of our revenue from our continuing operations. If we were to lose one of our major customers or have a major customersignificantly reduce its volume of business with us, our revenues and profitability would be materially reduced unless we are able to replace such demand with otherorders promptly. We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.We generally sell our products on the basis of purchase orders. Thus, most of our customers could cease purchasing our products with little or no notice andwithout penalties. In addition, delays in product orders could cause our quarterly revenue to vary significantly. A number of factors could cause our customers tocancel or defer orders, including interruptions to their operations due to a downturn in their industries, natural disasters, delays in manufacturing their own productofferings into which our products are incorporated, securing other sources for the products that we manufacture or developing such products internally.6If we are unable to attract or retain qualified personnel, our business could be harmed.Our success depends on our continued ability to identify, attract, hire, train, retain and motivate highly skilled technical, managerial, manufacturing,administrative and sales and marketing personnel. Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retainsufficiently qualified personnel. In particular, we may encounter difficulties in recruiting and retaining a sufficient number of qualified personnel. The inability toattract and retain necessary technical, managerial, manufacturing, administrative and sales and marketing personnel could harm our ability to obtain new customersand develop new products and could adversely affect our business and operating results. In addition, the loss of the services, or distraction, of our seniormanagement for any reason could adversely affect our business, operating results and financial condition. We are dependent on the continued services and performances of certain senior management employees such as sales management and the head of operations.Our future success is dependent on the continued services and contributions of our senior management who must work together effectively in order to designand produce our products, expand our business, increase our revenue and improve our operating results. The loss of services of our senior management for anyreason could adversely affect our business, operating results and financial condition.Our gross margins and profitability may be adversely affected by energy costs.All of our power consumption takes place in our manufacturing facility in the United States. Electricity prices could increase due to overall changes to the priceof energy due to conditions in the Middle East, natural gas shortages in the U.S. and other economic conditions and uncertainties regarding the outcome andimplications of such events. If electricity prices increase significantly, we may not be able to pass these price increases through to our customers on a timely basis, ifat all, which could adversely affect our gross margins and results of operations.The protection of our intellectual property rights and the defense of claims of infringement against us by third parties may subject us to costly litigation.Other companies might allege that we are infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtainlicenses on acceptable terms, we may face litigation. Any litigation to enforce patents issued to us, to protect trade secrets or knowhow possessed by us or todefend us or indemnify others against claimed infringement of the rights of others could have a material adverse effect on our financial condition and operatingresults. Regardless of the validity or successful outcome of any such intellectual property claims, we may need to expend significant time and expense to protect ourintellectual property rights or to defend against claims of infringement by third parties, which could have a material adverse effect on us. If we lose any suchlitigation where we are alleged to infringe the rights of others, we may be required to:●pay substantial damages;●seek licenses from others; or●change, or stop manufacturing or selling, some or all of our products.Any of these outcomes could have an adverse effect on our business, results of operations or financial condition.7We are subject to numerous environmental laws and regulations, which could expose us to environmental liabilities, increase our manufacturing and relatedcompliance costs or otherwise adversely affect our business and operating results.In our manufacturing process, we use water, oils, slurries, acids, adhesives and other industrial chemicals. We are subject to a variety of foreign, federal, stateand local laws and regulations governing the protection of the environment. These environmental laws and regulations include those relating to the use, storage,handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials used in our manufacturing processes. These materials mayhave been or could be released into the environment at properties currently or previously operated by us, at other locations during the transport of the materials, orat properties to which we send substances for treatment or disposal. If we were to violate or become liable under environmental laws and regulations or become noncompliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including investigation and cleanupcosts, fines and civil or criminal sanctions, thirdparty property damages or personal injury claims. In addition, new laws and regulations or stricter enforcement ofexisting laws and regulations could give rise to additional compliance costs and liabilities. RTW’s operations are concentrated in one facility, and the unavailability of this facility could harm our business.Our manufacturing, research and development, sales and marketing, and administrative activities are concentrated in one facility located in Bensenville, Illinois.Going forward, this will be RTW’s sole operating facility. Should a casualty, natural disaster, inclement weather, an outbreak of disease, power loss, an act ofterrorism or similar event affect the Chicagoland area, our operations could be significantly impacted. We may not be able to replicate the manufacturing capacityand other operations of our Bensenville facility or such replication could take significant time and resources to accomplish. The disruption from such an event couldadversely affect or interrupt entirely our ability to conduct our business.We are dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a materialadverse effect on our operations. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to oursystems, networks, products and services.We rely on information technology networks and systems, including the Internet and cloud services, many of which are managed by third parties, to securelyprocess, transmit and store electronic information of financial, marketing, legal and regulatory nature to manage our business processes and activities. Although wehave implemented enhanced controls around our information technology systems, these systems may be susceptible to damage, disruptions or shutdowns due tofailures during the process of upgrading or replacing software, databases, power outages, hardware failures, telecommunication failures, user errors, naturaldisasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, andour disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results, or our operations may be disrupted, exposingus to performance failures with customers. In addition, cybersecurity threats, such as computer viruses, attacks by computer hackers or other cybersecurity threatspose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There can be no assurance that our securitycontrols and safeguard measures taken to improve our cybersecurity protection will be sufficient to mitigate all potential risks to our systems, networks and data.Potential consequences of a cybersecurity attack include disruption to systems, corruption of data, unauthorized release of confidential or otherwise protectedinformation, reputational damage, and litigation with third parties. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilitiesrelated to a cybersecurity attack.Our U.S. NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code (“IRC”)or if changes are made to the IRC.We have significant U.S. NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and taxliabilities until such NOL carryforwards expire in accordance with the IRC of 1986, as amended. Our NOL carryforwards provide a benefit to us, if fully utilized, ofsignificant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. Ifwe do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOLcarryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability tosuccessfully identify and consummate suitable acquisitions or investment opportunities.8Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain builtinlosses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder’s right planto protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stockownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards.Under the recently enacted Tax Cut and Jobs Act, U.S. NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changeswere made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operatingresults and cash flows. The Company’s business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adverselyaffected by the COVID19 pandemic.COVID19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures haveincluded restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelterinplace orders. The COVID19 pandemichas significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The Company maintains a limited staffof fulltime employees in skilled technical, nontechnical and key management positions. If employees become infected by the COVID19 virus we may not be able tomaintain normal business operations for an extended period of time.The COVID19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact theCompany’s business, results of operations, financial condition and stock price. Following the initial outbreak of the virus, the Company experienced disruptions toits manufacturing, supply chain and logistical services provided by outsourcing partners, resulting in temporary supply shortages that affected sales worldwide.The Company is heavily reliant on domestic and foreign supply chains to operate its businesses. The COVID19 pandemic may limit and restrict our access tonecessary products that are required to operate.The Company is continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevantauthorities. The full extent of the impact of the COVID19 pandemic on the Company’s operational and financial performance is currently uncertain and will dependon many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development andavailability of effective treatments and vaccines, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on theglobal economy and demand for consumer products. Additional future impacts on the Company may include, but are not limited to, material adverse effects on:demand for the Company’s products and services; the Company’s supply chain and sales and distribution channels; the Company’s ability to execute its strategicplans; and the Company’s profitability and cost structure.To the extent the COVID19 pandemic adversely affects the Company’s business, results of operations, financial condition and stock price, it may also have theeffect of heightening many of the other risks described in this Part I, Item 1A of this Form 10K.RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCKThe trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each ofwhich could adversely affect our stockholders’ value.Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock,regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things:9●changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry;●our ability to meet the performance expectations of financial analysts or investors;●general market and economic conditions; and●the size of the public float of our stock.Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in theirbest interests.A number of provisions in our certificate of incorporation and bylaws, as well as antitakeover provisions of Delaware law, may have the effect of delaying,deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisionsinclude:●a classified Board of Directors;●a tax benefits preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, whichmay have the effect of discouraging transactions involving an actual or potential change in our ownership;●granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancyoccurs as a result of an increase in the number of directors or otherwise;●limitations on the ability of stockholders to remove directors;●the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may bedetermined at the sole discretion of the Board of Directors;●prohibition on stockholders from calling special meetings of stockholders;●prohibition on stockholders from acting by written consent; and●establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings. These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in atakeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stockif they are viewed as discouraging takeover attempts in the future.The foregoing provisions of our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our management. Theseprovisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the bestinterests of our stockholders.We are subject to litigation risks, including securities class action litigation, which may be costly to defend.All industries, including ours, are subject to legal claims, including securities litigation. When the market price of a stock declines significantly, due to factorssuch as trends in the stock market in general, broad market and industry fluctuations or operating performance, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. This sort of litigation can be particularly costly and may divert the attention of ourmanagement and our resources in general. We have been subject to securities class action litigation in the past, as disclosed in our previous filings with the SEC.Due to the inherent uncertainty of the litigation process, the resolution of any particular legal claim or proceeding (including by settlement) could have a materialeffect on our business, financial condition, results of operations or cash flows. Further, uncertainties resulting from the initiation and continuation of securities orother litigation could harm our ability to obtain credit and financing for our operations and to compete in the marketplace.10Our Board of Directors does not intend to declare or pay any dividends to our stockholders in the foreseeable future.The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among otherthings, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considersrelevant. There is no plan to pay dividends in the foreseeable future, and if dividends are paid, there can be no assurance with respect to the amount of any suchdividend.ITEM 1B. UNRESOLVED STAFF COMMENTSDisclosure under this item is not required, as the registrant is a smaller reporting company.ITEM 2. PROPERTIESAll of our sapphire operations and certain of our executive functions are located in our Bensenville, Illinois, 30,000 squarefoot facility that we purchased inSeptember 2018.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.The Company completed the sale of its Malaysian facility in June 2020. In December 2020, Rubicon sold all of the outstanding shares of capital stock of itswholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”).ITEM 3. LEGAL PROCEEDINGSFrom time to time, we, our subsidiaries and/or our directors and officers may be named in claims arising in the ordinary course of business. Managementbelieves that there are no pending legal proceedings involving us or any of our subsidiaries that will, individually or in the aggregate, have a material adverse effecton our consolidated results of operations or financial condition.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.11PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common stock trades on the NASDAQ Capital Market under the symbol “RBCN”. The following table sets forth the high and low sales prices for ourcommon stock as reported on the NASDAQ for the periods indicated:HighLowFiscal year ended December 31, 2021First Quarter$11.84$9.18Second Quarter$11.92$9.42Third Quarter$11.00$8.60Fourth Quarter$10.75$8.65HighLowFiscal year ended December 31, 2020First Quarter$9.16$7.15Second Quarter$9.00$7.25Third Quarter$8.85$7.75Fourth Quarter$10.00$8.39HoldersAs of February 28, 2022, our common stock was held by approximately 15 stockholders of record and there were 2,446,652 shares of our common stockoutstanding.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the growth and development ofour business and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The declaration, payment and amount of any futuredividends will be made at the discretion of our Board of Directors.ITEM 6. [Reserved]Disclosure under this item is not required as the registrant is a smaller reporting company.Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn November 2018, our Board of Directors authorized a program to repurchase up to $3,000,000 of our common stock. As of July 2020, the Company used all ofthe original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time.There was no share repurchase activity during the year ended December 31, 2021.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and relatednotes appearing elsewhere in this Annual Report on Form 10K. This discussion and analysis contains forwardlooking statements that involve risks,uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actualresults to differ materially from the results described in or implied by the forwardlooking statements described in the following discussion and analysis.12OVERVIEWRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. Sapphire is a desirablematerial for highperformance applications due to its hardness and strength, transparency in the visible and infrared spectrum, thermal conductivity, thermal shockresistance, abrasion resistance, high melting point and chemical inertness. As a result, it is ideally suited for extreme environments in a range of industries wherematerial durability is just as important as optical clarity. We believe that we continue to have a reputation as one of the highest quality sapphire sources in themarket. We provide optical and industrial sapphire products in a variety of shapes and sizes, including round and rectangular windows, blanks, domes, tubes androds.Historically, we have also provided sapphire products to the LED and mobile device markets, which are the largest markets for sapphire. However, givencompetitive pressures in those markets, in the fourth quarter of 2016 we announced our decision to focus on the optical and industrial sapphire markets and exit theLED market. Following this decision, we closed our Malaysia facility and scaled down and consolidated our remaining operations in the U.S. In the succeeding yearswe have completed individual sales and held auctions for assets located in Malaysia and at each of our U.S. properties, resulting in the sale of certain of our excessequipment and consumable assets. In December 2019 we entered into a purchase and sale agreement to sell our manufacturing facility located in Malaysia. In June2020, the Company completed the sale of its Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes,brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. InDecember 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. TheCompany recorded a gain on the sale of $261,000. In February 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois (seeFootnote 13). The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.We manage our operations and ship from our owned facility located in Bensenville, Illinois.Our sapphire business operates in a very competitive market. Our ability to expand our optical and industrial business and the acceptance of new productofferings are difficult to predict. Our total sales backlog was approximately $1,735,000 and $747,000 as of December 31, 2021 and 2020, respectively.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken, andcame in easytouse, perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered byDirect Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Rubicon is actively evaluating the acquisition of profitable companies in order to utilize our substantial net operating loss (“NOL”) tax carryforwards.Rubicon Technology, Inc. is a Delaware corporation and was incorporated on February 7, 2001. Our common stock is listed on the NASDAQ Capital Marketunder the ticker symbol “RBCN.” Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a small number of customers. Forthe year ended December 31, 2021, we had three customers individually that accounted for approximately 22%, 12%, and 12% of our revenue from our continuingoperations. For the year ended December 31, 2020, we had four customers individually that accounted for approximately 21%, 13%, 11%, and 10% of our revenuefrom our continuing operations. Our principal customers have been defense subcontractors, industrial manufacturers, fabricators and resellers. Although we areattempting to diversify and expand our customer base, we expect our sales to continue to be concentrated among a small number of customers. However, we alsoexpect that our significant customers may change from time to time. No other customer accounted for 10% or more of our revenues from our continuing operationsduring the years ended December 31, 2021 and 2020 other than those referred to above.13We sell our products on a global basis and historically derived a significant portion of our revenue from customers outside of North America, with the majorityof our sales to the Asian and European markets. Following the decision to limit our focus to the optical and industrial sapphire markets, a major source of ourrevenue is derived from the North American market. For the year ended December 31, 2021, the North American and other markets accounted for 90% and 10% of ourrevenue, respectively. For the year ended December 31, 2020, the North American and other markets accounted for 88% and 12% of our revenue of continuingoperations, respectively. All our revenue and corresponding accounts receivable are denominated in U.S. dollars. For more information about our revenues bygeographic region, see Note 2 – Segment Information of our Consolidated Financial Statements included in this Annual Report on Form 10K.Financial operationsRevenue. RTW’s revenue consists of sales of optical and industrial sapphire products sold as blanks or polished windows. Products are made to varyingspecifications, such as crystal planar orientations and thicknesses. With the focus on smaller optical and industrial markets and the consolidation of our operationsin the U.S., we expect in future periods our revenue will continue to be primarily from the sale of optical materials. We recognize revenue once the performanceobligation is satisfied, when the product is manufactured to the customer’s specification and based upon shipping terms, title, and control of the product and risk ofloss transfer to the customer. Delays in product orders or changes to the timing of shipments could cause our quarterly revenue to vary significantly. All of ourrevenue and corresponding accounts receivable are denominated in U.S. dollars. Substantially all our revenue is generated by our direct sales team and we expectthis to continue in the future.Cost of goods sold. Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing related overhead such as utilities, depreciation,rent, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight and warranties. We purchase materials and supplies tosupport current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not havelongterm fixedprice agreements with our suppliers. We currently outsource some of our production processes and needs.Gross profit (loss). Our gross profit (loss) has been and will continue to be affected by a variety of factors, including average sales prices of our products,product mix, our ability to reduce manufacturing costs, idle plant charges and fluctuations in the costs of electricity, production supplies and other manufacturingoverhead costs.General and administrative expenses. General and administrative expenses (“G&A”) consist primarily of compensation and associated costs for employees infinance, information technology and administrative activities, charges for accounting, legal services, insurance and stockbased compensation.Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and associated costs for employees engaged in sales activities,product samples, charges for participation in trade shows and travel.(Gain) loss on sale or disposal of assets. (Gain) loss on sale or disposal of assets represents the difference between the amount of proceeds from sale of ourproperty, equipment and consumable assets and their respective net book values. When the amount of proceeds exceeds the net book value of an underlying asset,we record this favorable variance as a gain on sale or disposal of assets. Alternatively, when the net book value of an asset exceeds the amount of proceedsrecovered from sale or disposal of this asset, such unfavorable variance is recorded as a loss on sale or disposal of assets.Other income (expense). Other income (expense) consists of interest income, gains and losses on investments, and currency translation. 14Provision for income tax. We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporarydifferences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect forthe year in which the differences are expected to be recognized. Our analysis of ownership changes that limit the utilization of our NOL carryforwards as ofDecember 31, 2021, shows no impact on such utilization. We are in a cumulative loss position for the past three years which is considered significant negativeevidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Based on an evaluation in accordance with theaccounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order tomeasure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. Until an appropriatelevel of sustained profitability is attained, we expect to maintain a full valuation allowance on our U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysiatax benefits or tax expense recorded on the Consolidated Statement of Operations will be offset with the corresponding adjustment from the use of the NOLcarryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount of deferred tax assets that can berealized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.Stockbased compensation. The majority of our stockbased compensation relates primarily to our Board of Directors, executive and administrative personneland is accounted for as a G&A expense. For the years ended December 31, 2021 and 2020, our stockbased compensation expense was $371,000 and $199,000,respectively.RESULTS OF OPERATIONSThe following table sets forth our consolidated statements of continuing operations for the periods indicated:Year EndedDecember 31,20212020(in thousands)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses: General and administrative2,1301,942 Sales and marketing210280 Gain on sale or disposal of assets(613)(2,084)Total operating expenses1,728138Income (loss) from continuing operations(464)870Other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Loss from discontinued operations, net of taxes(271)(340)Income tax expense13Net loss$(730)$(1,063)15The following table sets forth our statements of operations as a percentage of total revenue for the periods indicated: Year EndedDecember 31,20212020Revenue100%100%Cost of goods sold6972Gross profit3128Operating expenses:General and administrative5254Sales and marketing58Gain on sale or disposal of assets(15)(58)Total operating expenses424Income (loss) from continuing operations(11)24Other expense0(44)Loss before income taxes from continuing operations(11)(20)Loss from discontinued operations, net of taxes(7)(9)Income tax expenseNet loss(18)%(29)%Comparison of years ended December 31, 2021 and 2020Revenue. Revenue from continuing operations was $4,061,000 for the year ended December 31, 2021, and $3,616,000 for the year ended December 31, 2020, anincrease of $445,000. This increase was due to an increase in sapphire sales. These sales are impacted by demand fluctuations as well as the timing of purchaseorders and shipments.Revenue from discontinued operations was $370,000 and $851,000 for the years ended December 31, 2021 and 2020, respectively. This decrease of $481,000 wasprimarily due to the discontinuation of operations in June 2021.Gross profit (loss). Gross profit from continuing operations was $1,263,000 for the year ended December 31, 2021 and $1,008,000 for the year endedDecember 31, 2020, an increase of $255,000. The gross profit increase was due to the increase in revenue and efficiencies achieved by outsourcing various aspectsof our production processes.Gross profit from discontinued operations was $33,000 and $233,000, for the years ended December 31, 2021 and 2020, respectively. This decrease of $200,000was due primarily to increased inventory cost and decreased reimbursement rates from plan benefit managers, as well as the discontinuation of operations.General and administrative expenses. General and administrative expenses from continuing operations were $2,130,000 and $1,942,000 for the years endedDecember 31, 2021 and 2020 respectively, an increase of $188,000 which was primarily due to an increase in legal, audit, and other consulting fees of $87,000, anincrease in insurance expense of $54,000, and an increase in employee compensation of $87,000, offset by a decrease in other administrative costs of $46,000.General and administrative expenses from discontinued operations were $285,000 and $528,000 for the years ended December 31, 2021 and 2020, respectively.This decrease of $243,000 was primarily attributable to a reduction in personnel expenses and the winding down of operations.Sales and marketing expenses. Sales and marketing expenses from continuing operations were $210,000 and $280,000 for the years ended December 31, 2021and 2020, respectively, a decrease of $70,000. This was primarily due to a decrease in staffing.Sales and marketing expenses from discontinued operations were $10,000 and $45,000, for the years ended December 31, 2021 and 2020, respectively. Thisdecrease of $35,000 was primarily due to a decrease in staffing and the discontinuation of operations.(Gain) loss on sale or disposal of assets. During 2021, the Company recorded a gain of $613,000 from the sale of excess equipment and consumable assets ofcontinuing operations.In June 2020, the Company completed the sale of its Malaysian facility resulting in net proceeds of approximately $4,800,000 million after the payment of consentfees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately$1,800,000. In December 2020, Rubicon sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN BHD for gross proceeds of approximately $775,000. The Company recorded a gain from such stock sale of $261,000. 16The Company recorded a loss on the sale of assets from discontinued operations of $9,000 for the year ended December 31, 2021.Longlived asset impairment charges. We did not record any additional asset impairment expenses for the years ended December 31, 2021 and December 31,2020. We will continue to assess our longlived assets to ensure the carrying amount of these assets is still appropriate given any changes in the asset usage,marketplace and other factors used in determining the current fair value.Other income (expense). Other income (expense) from continuing operations was $5,000 and $(1,580,000) for the years ended December 31, 2021 and 2020,respectively, an increase of $1,585,000. Other income in 2021 was comprised of interest income of $5,000. Other (expense) in 2020 was comprised of realized (loss) oninvestments of ($1,824,000) offset by interest income and a gain on foreign currency translation of $108,000 and $136,000, respectively, resulting in the net increaseof $1,585,000.Income tax (expense) benefit. We are subject to income taxes in the United States. On an annual basis, we assess the recoverability of deferred tax assets andthe need for a valuation allowance. For the year ended December 31, 2021, a valuation allowance has been included in the 2021 forecasted effective tax rate. AtDecember 31, 2021, we continue to be in a threeyear cumulative loss position; therefore, as of December 31, 2021, we maintained a full valuation allowance on ourUnited States net deferred tax assets and until an appropriate level of profitability is attained, we expect to maintain a full valuation allowance going forward. In theevent that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a correspondingimpact to the provision for income taxes in the period in which such determination is made.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed us torecord provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment.We have completed our accounting for the tax effects of the enactment of the Act. The deemed inclusion from the repatriation tax was $5.0 million at the time thecalculation was finalized for the tax return. As we are in a full valuation allowance position (as described above), an equal benefit adjustment was recorded for theimpact of the increase of the deemed repatriation tax. The tax provision for the years ended December 31, 2021 and 2020 is based on an estimated combined statutoryeffective tax rate. For the years ended December 31, 2021 and 2020, we recorded a tax expense of $0 and $13,000, respectively, for an effective tax rate of 0.0% and1.0%, respectively. For the years ended December 31, 2021 and 2020, the difference between our effective tax rate and the U.S. federal 21% statutory rate and state7.4% (net of federal benefit) statutory rate was primarily related to the change in our U.S. and Malaysia NOL valuation allowances, U.S. R&D credit, Malaysia foreigntax rate differential and Malaysia withholding taxes.At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million, and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26,400,000 of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2,600,000 that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.17LIQUIDITY AND CAPITAL RESOURCESWe have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.As of December 31, 2021, we had cash equivalents and shortterm investments totaling $26,011,000, including cash of $8,123,000 held in deposits at major banks,$3,137,000 invested in money market funds and $14,751,000 of shortterm investments in U.S. Treasury securities.We plan to limit our capital expenditures primarily to only those required under existing obligations or as otherwise necessary to realize value from thedevelopment, commercialization or sale of products. Cash used in operating activities of continuing operations was $61,000 for the year ended December 31, 2021. The Company generated a net loss of $459,000,including noncash items of $102,000, and an increase in cash from a decrease in net working capital of $500,000. The net working capital decrease was primarilydriven by a decrease in inventories of $356,000, was a decrease in prepaid assets and other current assets of $108,000, and an increase in accrued payroll of $215,000.Additionally, there was an increase in accounts receivable of $236,000, which was the result of an increase in 3rd party trade receivables of $447,000 offset by a$211,000 decrease in amounts due from Direct Dose Rx.Cash provided from operating activities of continuing operations was $181,000 for the year ended December 31, 2020. During 2020, there was a net loss of$723,000, including noncash items of $91,000, and an increase in cash from a decrease in net working capital of $813,000. The net working capital decrease wasprimarily driven by a decrease in accounts receivable of $257,000, which was the result of a decrease in 3rd party trade receivables of $737,000 offset by a $480,000increase in amounts due from Direct Dose Rx. Additionally, there was a decrease in prepaid expenses and other assets of $199,000 from refunded security depositsand purchases against a vendor credit partially offset by increased insurance premiums, as well as a decrease in accounts payable and accrued liabilities of $401,000primarily from a $400,000 payment on hold at the end of the prior year.Cash used in discontinued operations for the year ended December 31, 2021 of $262,000 was primarily the result of a net loss from discontinued operations of$271,000, as well as a decrease in inventories of $59,000 and an increase in accounts payable of $29,000. There was also a decrease in 3rd party trade receivables of$113,000, as well as a decrease in amounts owed to Rubicon of $211,000.Cash provided by discontinued operations for the year ended December 31, 2020 of $116,000 was primarily the result of a net loss from discontinued operationsof $340,000, an increase in accounts payable of $23,000, in addition to an increase in 3rd party trade receivables of $71,000, as well as an increase in amounts owed toRubicon of $480,000.Net cash provided from investing activities of continuing operations of $640,000 for the year ended December 31, 2021 was from the sale of excess equipmentand consumable assets. Net cash provided from investing activities of continuing operations was $4,536,000 for the year ended December 31, 2020. This increase in net cash was theresult of the sale of the Company’s Malaysian facility for net proceeds of approximately $4,800,000 after the payment of consent fees, real estate taxes, brokerage andlegal fees, transfer and other expenses assets, the sale of our Malaysia subsidiary for net proceeds of $744,000, the receipt by the Company of $1,700,000 from thesales of investments, offset by the use of $2,800,000 to purchase U.S. Treasury securities and marketable securities.Cash flows from financing activitiesNet cash used in financing activities of continuing operations was $187,000 for the year ended December 31, 2021, resulting from cash used to settle net equityawards of $187,000.Net cash used in financing activities of continuing operations was $2,447,000 for the year ended December 31, 2020, driven by purchases of our treasury stockof $2,400,000 and cash used to settle net equity awards of $48,000.18Future liquidity requirementsWe believe that our existing cash, cash equivalents, anticipated cash flows from operating activities and proceeds from sales or lease of fixed assets will besufficient to meet our anticipated cash needs for at least the next twelve months from the date of filing of this report. However, if our ability to generate sufficientoperating cash flow or our use of cash in the next twelve months were to significantly adversely change, we may not have enough funds available to continueoperating at our current level in future periods. Our cash needs include cash required to fund our operations. If the assumptions underlying our business planregarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertibledebt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could besignificantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements in accordance with the accounting principles generally accepted in the U.S. requires us to make estimates, assumptionsand judgments that affect the amounts reported in our financial statements and the accompanying notes. We base our estimates on historical experience and variousother assumptions that we believe to be reasonable. Although these estimates are based on our present best knowledge of the future impact on the Company ofcurrent events and actions, actual results may differ from these estimates, assumptions and judgments.We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimatesabout the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial conditionand results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used inpreparation of our financial statements.Foreign currency translation and transactions.We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD (“RST”), which was sold in December 2020, is the U.S.dollar. RST’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated at historical exchange ratesand monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RST are included in determining netincome (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record thesegains and losses in other income (expense).Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanour functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination ofnet income (loss) for the period. We record these gains and losses in other income (expense).Revenue recognition.We recognize revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1, 2018. Werecognize revenue when performance obligations under a purchase order or signed quotation are satisfied. Our business practice commits us to manufacture anddeliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement with the customer includes specifications of theproduct to be delivered, price, expected ship date and payment terms. Our agreements generally do not contain variable, financing, rights of return or noncashcomponents. There are no upfront costs to develop the production process. The performance obligation is satisfied at the point in time (single performanceobligation) when the product is manufactured to the customer’s specification, as performance does not create an asset with an alternative use to us. Accordingly,revenue is recognized when product is shipped, and control of the product, title and risk of loss transfer to a customer. We grant credit terms considering normalcollection risk. If there is doubt about collection, full prepayment for the order is required. Any payments received prior to shipment are recorded as deferredrevenue and included in Advance Payments in the Consolidated Balance Sheets.We do not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of our revenue is denominated in U.S. dollars.19Inventory valuationWe value our inventory at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary courseof business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis which includes materials, labor and overhead. We establish inventory reserves when conditionsexist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize thevalue of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ productspecifications. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded a reduction inthe inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumed inventory thathad previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goods sold for the sameamount. In addition, in 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventoryreserve and cost of goods sold of $27,000. In 2020, we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of costor market inventory reserve and cost of goods sold of $21,000. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 compared to$7,908,000 at December 31, 2020. We did not record any additional writedowns of consumable inventories for the years ended December 31, 2021 and 2020.We did not record any additional adjustments of raw materials for the year ended December 31, 2021 and 2020, as we sold some of such raw materials at a priceexceeding its book value.Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. If our recognition of excess or obsolete inventory is,or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required.As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.We determine our normal operating capacity and record as an expense costs attributable to lower utilization of equipment and staff. For the years endedDecember 31, 2021 and 2020, such expenses were $99,000 and $132,000, respectively.InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, toliquidate in order to support our current operations are classified as shortterm.We review our availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on the specificidentification method. We consider various factors in determining whether an impairment is otherthantemporary, including the severity and duration of theimpairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for anyanticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement ofOperations. As of December 31, 2021, and 2020, no impairment was recorded.20Allowance for doubtful accountsWe estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk forcollection is assessed on a customerbycustomer basis considering our historical experience and expected future orders with the customer, changes in paymentpatterns and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection,we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. If a receivable isdeemed uncollectible, and the account balance differs from the allowance provided, the specific amount is written off to bad debt expense. We believe that based onthe customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remainedconsistent for all periods presented and with past collections experience. Assets held for sale and longlived assetsWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, we perform an analysis toreview the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected futureoperations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000. In December 2020, the Company completed the sale of all of the outstanding shares of capitalstock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. The company recorded a gain on such stock sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the property is subject to certain conditions precedent. While there is currently no anticipated closing date, we expect to complete the salewithin the next twelvemonth period. As such, this property was classified as current assets held for sale at December 31, 2021 and 2020.Stockbased compensationWe grant stockbased compensation in the form of stock options, restricted stock units (“RSUs”) and restricted stock. We expense stock options based uponthe fair value on the date of grant. We use the BlackScholes option pricing model to determine the fair value of stock options. The determination of the fair value ofstockbased payment awards on the date of grant using an optionpricing model is affected by assumptions regarding a number of complex and subjective variables.These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, riskfree interestrates, forfeitures and expected dividends.The expected term represents the weightedaverage period that our stock options are expected to be outstanding and is based upon five years of historical data.We estimate the volatility of our common stock based on a fiveyear historical stock price. We base the riskfree interest rate that we use in the option pricing modelon U.S. Treasury zerocoupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in theforeseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant andrevise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 36.13% was based on our past history offorfeitures.21All stock options are granted at an exercise price per share equal to the closing market price of our common stock on the last market trading day prior to the dateof grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date ofgrant.We used a Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted to a key executive pursuant to an employmentagreement, because the awards vest based upon achievement of market price targets of our common stock. The Monte Carlo simulation model utilizes multiple inputvariables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The daily expected stockprice volatility is based on a fouryear historical volatility of our common stock. The daily expected dividend yield is based on annual expected dividend payments.The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value andrequisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years.We allocate stockbased compensation costs relating to options using a straightline method which amortizes the fair value of each option on a straightlinebasis over the service period, but in no event less than the amount vested.All option grants are granted at an exercise price per share equal to the closing market price of our common stock on the day before the date of grant. Therefore,there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant. Based on the fairvalue of the common stock on December 31, 2021, there was $7,000 of intrinsic value arising from 4,050 stock options exercisable or outstanding.For more information on stockbased compensation, see Note 7 – Stock Incentive Plans to our Consolidated Financial Statements included in this AnnualReport on Form 10K.Income tax valuation allowanceEvaluating the need for and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positiveand negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be establishedfor deferred tax assets when it is more likely than not (a probability level of more than 50%) that they will not be realized. In general, “realization” refers to theincremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that theunderlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuationallowance, we consider the source of taxable income including taxable income in prior carryback years, future reversals of existing temporary differences, therequired use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. We are in a cumulative lossposition for the past three years which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard throughobjectively verifiable data. Under the accounting standards, verifiable evidence will have greater weight than subjective evidence such as our projections for futuregrowth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2021, a valuation allowance has been recorded against the net U.S.deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the availableevidence. Any U.S. and Malaysia tax benefit or tax expense recorded on the Consolidated Statement of Operations will be offset with a corresponding adjustmentfrom the use of the NOL carryforward asset which currently has a full valuation allowance. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in whichsuch determination is made.22Accounting for uncertainty in income taxesWe recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 31, 2021 and 2020, we had $1.1 million of unrecognized taxbenefits taken or expected to be taken in a tax return that have been recorded on our financial statements as an offset to the valuation allowance related to taxpositions taken in 2012. We recognize interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related toincome taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006,2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012through 2020 are open to examination by state tax authorities.RECENT ACCOUNTING PRONOUNCEMENTSSee Note 1 to the Consolidated Financial Statements for a discussion of new accounting standards.OFFBALANCE SHEET ARRANGEMENTSNone.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDisclosure under this item is not required as the registrant is a smaller reporting company.ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAOur Consolidated Financial Statements, together with the related notes and the report of independent registered public accounting firm, are set forth on thepages indicated in Item 15 of this Annual Report on Form 10K and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.None.ITEM 9A. CONTROLS AND PROCEDURESManagement’s Evaluation of Disclosure Controls and Procedures.An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and acting chieffinancial officer (“certifying officer”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a15(e) and15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the year covered by this report. Disclosure controls andprocedures are controls and other procedures designed to ensure that information required to be disclosed by us in our periodic reports filed with the SEC isrecorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information is accumulated andcommunicated to our management, including the chief executive officer and acting chief financial officer, as appropriate to allow timely decisions regarding requireddisclosure. Based on the evaluation, our certifying officer concluded that these disclosure controls and procedures were effective as of December 31, 2021.23Management’s Report on Internal Control over Financial ReportingThe financial statements were prepared by management, which is responsible for their integrity and objectivity and for establishing and maintaining adequateinternal control over financial reporting, as such term is defined in Exchange Act Rules 13a15(f) and 15d15(f).The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financialreporting includes those policies and procedures that:i.pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;ii.provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; andiii.provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that couldhave a material effect on the Consolidated Financial Statements.There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding ofcontrols. Accordingly, even effective internal controls can provide only reasonable assurance with respect to the financial statement preparation. Further, becauseof changes in conditions, the effectiveness of internal controls may vary over time.Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of December 31,2021. In making thisassessment, management used the criteria set forth in 2013 Internal Control—Integrated Framework by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).Based on management’s assessment using those criteria, as of December 31, 2021, management concluded that the Company’s internal control over financialreporting was effective.This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting. The Company’s internal controls over financial reporting were not subject to attestation by our independent registered public accounting firm pursuant torules of the SEC.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021, that our certifyingofficers concluded materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.ITEM 9B. OTHER INFORMATIONNone. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNone.24PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe Information required by Items 401, 405, 407(d)(4) and 407(d)(5) of Regulation SK will be included under the captions “Proposal 1: Election of Directors,”“Executive Compensation – Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters –Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance – Committees of the Board of Directors and Meetings – Audit Committee” inour proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.We have adopted a Code of Ethics that applies to all of our employees, officers and directors. If you would like a copy our Code of Ethics, write to InvestorRelations, Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106, and a copy of the Code of Ethics will be provided to you, free of charge.ITEM 11. EXECUTIVE COMPENSATIONThe information required by Item 402 of Regulation SK will be included under the captions “Executive Compensation” and “Director Compensation” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurities Authorized for Issuance under Equity Compensation PlansThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, andthe Rubicon Technology Inc. 2016 Stock Incentive Plan as of December 31, 2021.25Equity Compensation Plan InformationPlan categoryNumber ofsecuritiesto be issuedupon exercise ofoutstanding options,warrants and rightsWeightedaverageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuancesunder the equitycompensation plans(excluding securitiesreflected in column(a))(a)(b)(c)Equity compensation plans approved by security holders(1)32,080$14.16304,731(1)The Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016Stock Incentive Plan was approved by stockholders in June 2016.The information required by Item 403 of Regulation SK will be included under the caption “Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters” in our proxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxystatement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not laterthan the end of such 120day period.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by Item 404 of Regulation SK will be included under the caption “Certain Relationships and Related Party Transactions” in our proxystatement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. The information required by Item 407(a) of Regulation SK will beincluded under the caption “Corporate Governance Director Independence” in our proxy statement for our 2022 Annual Meeting of Stockholders and isincorporated by reference herein. If such proxy statement is not filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10K, anamendment to this Form 10K shall be filed not later than the end of such 120day period.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item will be included under the caption “Ratification of Selection of Independent Registered Public Accounting Firm” in ourproxy statement for our 2022 Annual Meeting of Stockholders and is incorporated by reference herein. If such proxy statement is not filed with the SEC within120 days after the end of the fiscal year covered by this Form 10K, an amendment to this Form 10K shall be filed not later than the end of such 120day period. 26PART IVITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(a) Financial statements. The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10K.PageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9(b) Exhibits. The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature pageto this Annual Report on Form 10K and are incorporated by reference.(c) Financial statement schedules not listed above have been omitted because they are inapplicable, are not required under applicable provisions of RegulationSX, or the information that would otherwise be included in such schedules is contained in the registrant’s financial statements or accompanying notes. 27SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized on March 25, 2022.Rubicon Technology, Inc.By/s/ Timothy E. BrogDirector, President, Chief Executive Officer and ActingChief Financial OfficerKNOWN BY ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy E. Brog, jointly andseverally, his or her attorneyinfact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form10K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying andconfirming all that each of said attorneysinfact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 25, 2022.SignatureTitle/s/ Timothy E. Brog Director, President, Chief Executive Officer and ActingTimothy E. BrogChief Financial Officer/s/ Michael E. Mikolajczyk Chairman of the Board of DirectorsMichael E. Mikolajczyk/s/ Susan Westphal DirectorSusan Westphal/s/ Jefferson Gramm DirectorJefferson Gramm28EXHIBIT INDEXThe Exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10K.Exhibit No.DescriptionIncorporation by Reference3.1Eighth Amended and Restated Certificate of Incorporation of RubiconTechnology, Inc.Filed as Exhibit 3.1 to the registrant’s Registration Statement on Form S1/A, filed on November 1, 2007 (File No. 333145880)3.2Amendment No. 1 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on April 29, 2011 (File No. 133834)3.3Amendment No. 2 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 4, 2017 (File No. 133834)3.4Second Amended and Restated Bylaws of Rubicon Technology, Inc.Filed as Exhibit 3.3 to the registrant’s Quarterly Report on Form 10Q,filed on May 10, 2016 (File No. 133834)3.5Certificate of Designations of Series A Junior Participating Preferred Stockof Rubicon Technology, Inc. filed with the Secretary of State of Delaware onDecember 18, 2017.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)3.6Amendment No. 3 to Eighth Amended and Restated Certificate ofIncorporation of Rubicon Technology, Inc.Filed as Exhibit 3.1 to the registrant’s Current Report on Form 8K, filedon May 15, 2018 (File No. 133834)4.1Specimen Common Stock CertificateFiled as Exhibit 4.1 to the registrant’s Registration Statement on Form S1/A, filed on November 13, 2007 (File No. 333145880)4.2Rights Agreement dated as of December 18, 2017, between RubiconTechnology, Inc. and American Stock Transfer & Trust Company, LLC,which includes the Form of Certificate of Designations of Series A JuniorParticipating Preferred Stock as Exhibit A, the Form of Right Certificate asExhibit B and the Summary of Rights to Purchase Preferred Shares asExhibit C.Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2017 (File No. 133834)4.3Amendment No. 1 to the Rights Agreement, dated as of December 18, 2020,between Rubicon Technology, Inc. and American Stock Transfer & TrustCompany, LLCFiled as Exhibit 4.1 to the registrant’s Current Report on Form 8K, filedon December 18, 2020 (File No. 133834)10.1*Rubicon Technology, Inc. 2007 Stock Incentive Plan, as amended andrestated, effective March 23, 2011Filed as Exhibit 10.2 to the registrant’s Annual Report on Form 10K,filed on March 13, 2014 (File No. 133834)10.2*Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Appendix A to the registrant’s Definitive Proxy Statement onSchedule 14A, filed on May 18, 2016 (File No. 133834)10.3(a)*Form of Notice of Stock Option Grant and Stock Option Agreementpursuant to Rubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(b)*Form of NonEmployee Director Restricted Stock Agreement pursuant toRubicon Technology, Inc. 2016 Stock Incentive PlanFiled as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.3(c)*Form of Restricted Stock Unit Agreement pursuant to Rubicon Technology,Inc. 2016 Stock Incentive Plan (with timebased vesting)Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10Q,filed on August 9, 2016 (File No. 133834)10.4*Form of Indemnification Agreement for Directors and Executive OfficersFiled as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on May 8, 2015 (File No. 133834)10.5*Executive Employment Agreement by and between Rubicon Technology,Inc. and Timothy E. Brog, dated as of March 1, 2017Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 16, 2017 (File No. 133834)2910.6*Amended and Restated Executive Employment Agreement by and betweenRubicon Technology, Inc. and Timothy E. Brog, dated as of May 12, 2017Filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10Q,filed on May 12, 2017 (File No. 133834)10.7Stockholder’s Agreement dated as of November 16, 2017, by and amongRubicon Technology, Inc. and Bandera Partners LLC, Bandera Master FundL.P., Gregory Bylinsky and Jefferson GrammFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon November 16, 2017 (File No. 133834)10.8 Asset Purchase Agreement, dated as of May 17, 2019, by and amongWellfount, Corporation, Rubicon DTP LLC and Rubicon Technology, Inc.Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10Q,filed on August 14, 2019 (File No. 133834)10.9Sale and Purchase Agreement, dated as of December 19, 2019, by andamong Rubicon Sapphire Technology (Malaysia) SDN. BHD., RubiconTechnology, Inc. and Computime (Malaysia) SDN. BHDFiled as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon December 19, 2019 (File No. 133834)10.10 Share Sale Agreement, dated December 9, 2020 between RubiconTechnology, Inc. and Kang Lan HiangFiled as Exhibit 10.1 to the Registrant’s Current Report on Form 8K,filed on December 9, 2020 (File No. 133834)10.11*Executive Employment Agreement by and between Rubicon Technology,Inc. and Kevin T. Lusardi, dated as of March 17, 2021Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon March 22, 2021 (File No. 133834)10.12Real Estate Sales Contract, dated as of February 9, 2022, between RubiconTechnology, Inc. and Capitol Trucking, Inc., a Texas corporation for thepurchase of that parcel of real property commonly known as Fox ValleyBusiness Park, Lot 101, Batavia, Illinois, 60510.Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8K, filedon February 9, 2022 (File No. 133834)21.1**Subsidiaries of the Company23.1**Consent of Independent Registered Public Accounting Firm24.1**Power of Attorney (incorporated by reference to the signature page of thisAnnual Report on Form 10K)31.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to Exchange Act Rules 13a14(a) and 15d14(a), as adoptedpursuant to Section 302 of the SarbanesOxley Act of 200232.1**Certification of Chief Executive Officer and Acting Chief Financial Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe SarbanesOxley Act of 2002101.INS**Inline XBRL Instance Document.101.SCH**Inline XBRL Taxonomy Extension Schema Document.101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase Document.101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase Document.101.LAB**Inline XBRL Taxonomy Extension Label Linkbase Document.101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*Management contract or compensatory plan or arrangement of the Company.**Submitted electronically with this Annual Report on Form 10K.30Rubicon Technology, Inc.INDEX TO FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF2Consolidated Balance Sheets as of December 31, 2021 and 2020F4Consolidated Statements of Operations for each of the two years in the period ended December 31, 2021F5Consolidated Statements of Comprehensive Income (Loss) for each of the two years in the period ended December 31, 2021F6Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 31, 2021F7Consolidated Statements of Cash Flows for each of the two years in the period ended December 31, 2021F8Notes to Consolidated Financial StatementsF9F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of Directors of Rubicon Technology, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Rubicon Technology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the periodended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cashflows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, weexpress no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.F2Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required tobe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, takenas a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate.The Company establishes inventory reserves when conditions exist to suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company’s management evaluates the ability to realize the net carrying value of its inventory based on a combination of factors,including forecasted sales, estimated current market value and changes in customers’ product specifications. Additionally, the Company reduces the carrying valuesof its inventories for differences between the cost and the estimated net realizable value, which is determined based on an estimated selling price less estimatedcosts of completion and disposal. Based on the likelihood of expected usage within the next operating cycle, generally 12 months, management makes adetermination on the appropriate presentation of inventory as a current or noncurrent asset in the financial statements.We identified the valuation and presentation of inventory as a critical audit matter. Auditing management judgment regarding forecasted sales, estimatedcurrent market value and anticipated customer product specifications, involved a high degree of subjectivity.The primary procedures we performed to address this critical audit matter included obtaining an understanding of management’s process for determining thecarrying value at the lower of cost or net realizable value of inventory and testing that value, and also evaluating the expected consumption within one year fromDecember 31, 2021 for presentation purposes. We evaluated the reasonableness of management’s forecasted consumption by comparing these forecasts tohistorical sales and inventory consumption, open orders, and performed a retrospective review of management’s estimates from the prior period./s/ Marcum LLPMarcum LLPUS PCAOB ID#: 688We have served as the Company’s auditor since 2017.Chicago, IllinoisMarch 25, 2022F3Rubicon Technology, Inc.Consolidated Balance SheetsAs ofDecember 31,20212020(in thousands, otherthan share data)AssetsCash and cash equivalents$11,260$11,130Shortterm investments14,75114,748Accounts receivable, net719386Inventories6581,073Other inventory supplies133140Prepaid expenses and other current assets167284Assets held for sale529529Total current assets28,21728,290Inventories, noncurrent468468Property and equipment, net2,3012,482Total assets$30,986$31,240Liabilities and stockholders’ equityAccounts payable$545$497Accrued payroll426211Accrued and other current liabilities220201Corporate income and franchise taxes327307Accrued real estate taxes7871Advance payments218Total current liabilities1,5981,305Commitments and contingencies (see Note 10)Stockholders’ equityPreferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstandingCommon stock, $0.001 par value 8,200,000 shares authorized; 2,995,680 and 2,971,283 shares issued; 2,446,652 and 2,422,255shares outstanding2929Additional paidin capital376,640376,456Treasury stock, at cost, 549,028 and 549,028 shares(15,147)(15,147)Accumulated other comprehensive loss(1)Accumulated deficit(332,133)(331,403)Total stockholders’ equity29,38829,935Total liabilities and stockholders’ equity$30,986$31,240The accompanying notes are an integral part of these consolidated financial statements.F4Rubicon Technology, Inc.Consolidated Statements of OperationsYear EndedDecember 31,20212020(in thousands, otherthan share data)Revenue$4,061$3,616Cost of goods sold2,7982,608Gross profit1,2631,008Operating expenses:General and administrative2,1301,942Sales and marketing210280Gain on sale or disposal of assets and subsidiary(613)(2,084)Income (loss) from continuing operations(464)870Other (expense) income:Interest income5108Realized loss on marketable securities(1,824)Realized gain on foreign currency translation136Total other (expense) income5(1,580)Loss before income taxes from continuing operations(459)(710)Income tax expense(13)Loss from continuing operations(459)(723)Loss from discontinued operations, net of taxes(271)(340)Net loss$(730)$(1,063)Net loss per common share: basicContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Net loss per common share: dilutedContinuing operations$(0.19)$(0.29)Discontinued operations$(0.11)$(0.14)Weighted average common shares outstanding used in computing net loss per common shareBasic2,439,7642,499,690Diluted2,439,7642,499,690The accompanying notes are an integral part of these consolidated financial statements.F5Rubicon Technology, Inc.Consolidated Statements of Comprehensive Income (Loss)Year EndedDecember 31,20212020(in thousands)Loss from continuing operations$(459)$(723)Loss from discontinued operations(271)(340)Net loss(730)(1,063)Other comprehensive income:Unrealized gain (loss) on investments, net of taxes(1)1Other comprehensive income (loss)(1)1Comprehensive loss$(731)$(1,062)The accompanying notes are an integral part of these consolidated financial statements.F6Rubicon Technology, Inc.Consolidated Statements of Stockholders’ EquityCommon stockTreasury stockStockholders’ equitySharesAmountSharesAmountAdditionalpaidincapitalAccumothercomplossAccumdeficitTotalstockholders’equity(in thousands other than share data)Balance at January 1, 20202,955,253$29(253,082)$(12,749)$376,306$(1)$(330,340)$33,245Stockbased compensation168168Restricted stock issued3,5973030Common stock issued, net ofshares withheld for employeetaxes12,433(48)(48)Purchase of treasury stock, atcost(295,946)(2,398)(2,398)Unrealized gain on investments,net of tax11Net loss(1,063)(1,063)Balance at December 31, 20202,971,283$29(549,028)$(15,147)$376,456$(331,403)$29,935Stockbased compensation371371Common stock issued, net ofshares withheld for employeetaxes24,397(187)(187)Unrealized loss on investments,net of tax(1)(1)Net loss(730)(730)Balance at December 31, 20212,995,680$29(549,028)$(15,147)$376,640$(1)$(332,133)$29,388The accompanying notes are an integral part of these consolidated financial statements.F7Rubicon Technology, Inc.Consolidated Statements of Cash FlowsYear EndedDecember 31,20212020(in thousands)Cash flows from operating activitiesLoss from continuing operations$(459)$(723)Adjustments to reconcile net loss from continuing operations to net cash used in continuing operationsDepreciation and amortization140152Net gain on sale or disposal of assets and subsidiary(613)(2,084)Realized loss on equity investments1,824Stockbased compensation371199Changes in operating assets and liabilities:Accounts receivable(236)257Inventories356630Other inventory supplies6Prepaid expenses and other assets108199Accounts payable19(258)Accrued payroll215159Corporate income and franchise taxes1910Accrued real estate taxes7(43)Advance payments(16)2Accrued and other current liabilities22(143)Net cash provided by (used in) operating activities from continuing operations(61)181Cash flows from discontinued operations(262)116Cash flows from investing activitiesPurchases of assets(2)Proceeds from sale or disposal of assets6434,909Proceeds from sale or disposal of subsidiary744Purchase of investments(6)(2,782)Proceeds from sale of investments31,667Net cash provided by investing activities6404,536Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(187)(48)Purchases of treasury stock(2,399)Net cash used in financing activities(187)(2,447)Net effect of currency translation(136)Net increase in cash and cash equivalents1302,250Cash and cash equivalents, beginning of year11,1308,880Cash and cash equivalents, end of year$11,260$11,130Supplemental disclosure of cash flow noneThe accompanying notes are an integral part of these consolidated financial statements.F8Rubicon Technology, Inc.Notes to Consolidated Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of businessRubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of one operating subsidiary, Rubicon Technology Worldwide LLC (“RTW”). InJune 2021 the operations of Rubicon DTP LLC (“Direct Dose Rx” or DDRX”) were discontinued.RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on aglobal basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area.In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specializedpharmacy that provided prescription medications, overthecounter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals anddirectly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and comein easytouse perforated strippackaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by DirectDose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.Principles of consolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, RubiconTechnology BP LLC, and Rubicon Sapphire Technology (Malaysia) SDN BHD., and the discontinued operations of Rubicon DTP LLC. In December 2020, theCompany sold all of the outstanding shares of capital stock of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia) SDN BHD. In June 2021, theoperations of Rubicon DTP LLC were discontinued. All intercompany transactions and balances have been eliminated in consolidation.A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows.Cash and cash equivalentsThe Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of timedeposits with banks, unsettled trades and brokerage money market accounts.Foreign currency translation and transactionsThe Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon SapphireTechnology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Nonmonetary assets are translated athistorical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for RubiconSapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars atthe average exchange rates during the respective period. The Company records these gains and losses in other income. Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other thanthe functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in thedetermination of net income (loss) for the period. The Company records these gains and losses in other income.F9InvestmentsWe invest our available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock,equityrelated securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains and lossesrecorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains andlosses recorded in other income (expenses), in the Consolidated Statements of Operations. Investments in which the Company has the ability and intent, ifnecessary, to liquidate in order to support the current operations are classified as shortterm.The Company reviews its availableforsale debt securities investments at the end of each quarter for otherthantemporary declines in fair value based on thespecific identification method. The Company considers various factors in determining whether an impairment is otherthantemporary, including the severity andduration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient toallow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludesthat an otherthantemporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on theConsolidated Statements of Operations. As of December 31, 2021, and 2020, no impairment was recorded.Purchases of Equity Securities by the IssuerIn November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company usedall of the original authorized $3,000,000.On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. The timing, priceand volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time,through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b51 plan. The program may beterminated, suspended or modified at any time. There can be no assurance as to the number of shares of common stock repurchased. The Company records treasurystock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.During the year ended December 31, 2020, the Company repurchased 295,946 shares at an average price of $8.10 per share. There was no share repurchaseactivity during the year ended December 31, 2021, and the approximate value of shares that may yet be purchased under the program remains at $3,000,000.Accounts receivableThe majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extendedbased on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, netof an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements.Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number offactors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industryas a whole. The Company writes off accounts receivable when they are deemed uncollectible and such writeoffs, net of payments received, are recorded as areduction to the allowance.F10Accounts receivable is comprised of a net total of $719,000 and $386,000 for the years ended December 31, 2021 and 2020, respectively. The breakdown ofaccounts receivable for continuing operations and discontinued operations is as follows:Year EndedYear EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.Year EndedDecember 31,20212020Continuing Operations:Trade receivables$732$281Allowance for doubtful accounts(7)(3)Discontinued Operations:Trade receivables6108Allowance for doubtful accounts(12)Balance of accounts receivable, net$719$386InventoriesInventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course ofbusiness less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the firstin, firstout method, and workinprocessand finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of itsinventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence andother relevant information.The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based oncustomer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales,estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventoryhas remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2021 was $7,749,000 million compared to $7,908,000million at December 31, 2020. For the year ended December 31, 2021, we consumed inventory that had previously been reflected as excess or obsolete and recorded areduction in the inventory reserve of $159,000 and a reduction to cost of goods sold for the same amount. For the year ended December 31, 2020, we consumedinventory that had previously been reflected as excess or obsolete and recorded a reduction in the inventory reserve of $44,000 and a reduction to cost of goodssold for the same amountThe Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. Asof December 31, 2021 and 2020, the balance of the lower of cost or market reserve was $25,000 and $52,000, respectively, representing a decrease of $27,000 resultingfrom sales of related reserved inventory. In 2020 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost ormarket inventory reserve and cost of goods sold of $21,000.In 2020 and 2021, the Company used some of its previously written down twoinch diameter core material in production of optical and industrial sapphire wafersand did not record any additional adjustments for the years ended December 31, 2020 and December 31, 2021.The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipatedsales. The Company did not record any writedowns of its raw materials inventory for the years ended December 31, 2020 and December 31, 2021. F11Inventories are composed of the following:As ofDecember 31,20212020(in thousands)Raw materials$468$468Workinprocess328614Finished goods330459$1,126$1,541As of December 31, 2021 and 2020, the Company made the determination that raw material inventories were such that the likelihood of significant usage withinthe current year was doubtful and reclassified such raw material inventories as noncurrent in the reported financial statements.Inventories of discontinued operations was approximately $0 and $59,000 at years ended December 31, 2021 and 2020, respectively.Other inventory suppliesThe Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process.Assets held for saleAn asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that thedisposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete thesale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively beingmarketed for sale at a price that is reasonable given its current market value.A longlived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the longlived asset is newlyacquired, the carrying amount of the longlived asset is established based on its fair value less cost to sell at the acquisition date. A longlived asset is notdepreciated or amortized while it is classified as held for sale.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020 for a net sale price ofapproximately $4,800,000 (based on the exchange rate on June 30, 2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees,transfer and other expenses. The Company recorded a gain on the disposal of the Malaysian facility of approximately $1,800,000. In December, 2020, the Companycompleted the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiary Rubicon Sapphire Technology (Malaysia)SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F12Property and equipmentProperty and equipment consisted of the following:As ofDecember 31,20212020(in thousands)Machinery, equipment and tooling$3,296$3,343Buildings1,7111,711Information systems819835Land and land improvements594594Furniture and fixtures78Total cost6,4276,491Accumulated depreciation and amortization(4,126)(4,009)Property and equipment, net$2,301$2,482Property and equipment are carried at cost and depreciated over their estimated useful lives using the straightline method. The cost of maintenance and repairsis charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was$140,000 and $152,000 for the years ended December 31, 2021 and 2020, respectively.The estimated useful lives are as follows:Asset descriptionLifeBuildings39 yearsMachinery, equipment and tooling310 yearsFurniture and fixtures7 yearsInformation systems3 yearsAs of December 31, 2021 and 2020, the property and equipment of the discontinued operations was $0 and less than $41,000, respectively. Warranty costThe Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost ofwarrantyrelated claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets.The following table presents changes in the Company’s product warranty liability:Year EndedDecember 31,20212020(in thousands)Balance, beginning of period$1$3Charged to cost of sales(9)(20)Actual product warranty expenditures918Balance, end of period$1$1The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements ordeliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000for the years ended December 31, 2021 and 2020, respectively.F13Fair value of financial instrumentsThe Company’s financial instruments consist primarily of cash and cash equivalents, shortterm investments, accounts receivable, and accounts payable. Thecarrying values of these assets and liabilities approximate their fair values due to the shortterm nature of these instruments at December 31, 2021 and 2020. Concentration of credit risks and other risks and uncertaintiesFinancial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restrictedcash, shortterm investments and accounts receivable. As of December 31, 2021, the Company had $8,100,000 on deposit at financial institutions in excess ofamounts insured by the FDIC. This compares to $8,000,000 as of December 31, 2020. The Company performs a periodic evaluation of these institutions for relativecredit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on thesebalances.The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These typesof services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantiallydepend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demandfor its products, which could have a material adverse impact on the Company.Concentration of credit risk related to revenue and accounts receivable is discussed in Note 4.Revenue recognitionRevenues recognized include product sales and billings for costs and fees for government contracts.Product SalesThe Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers (“Topic 606”) which was adopted on January 1,2018. The Company recognizes revenue when performance obligations under a purchase order or signed quotation are satisfied. The Company’s business practicecommits the Company to manufacture and deliver product upon acceptance of a customer’s purchase order or signed quotation (“agreement”). The agreement withthe customer includes specifications of the product to be delivered, price, expected ship date and payment terms. The Company’s agreements generally do notcontain variable, financing, rights of return or noncash components. There are no upfront costs to develop the production process. The performance obligation issatisfied at the point in time (single performance obligation) when the product is manufactured to the customer’s specification, as performance does not create anasset with an alternative use to the Company. Accordingly, the Company recognizes revenue when the product is shipped, and control of the product, title and riskof loss have been transferred to the customer. The Company grants credit terms considering normal collection risk. If there is doubt about collection, full prepaymentfor the order is required. Any payments received prior to shipment are recorded as deferred revenue and included in Advance Payments in the Consolidated BalanceSheets. The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars.Shipping and handling costsThe Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connectionwith these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements.F14Sales taxThe Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements ofOperations and records a liability until remitted to the respective tax authority. Stockbased compensationThe Company requires all sharebased payments to employees, including grants of employee stock options, to be measured at fair value and expensed in theConsolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements ofOperations for these sharebased payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants.Accounting for uncertainty in income taxesThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetaxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured basedon the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to incometax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years endedDecember 31, 2021 and 2020.The Company is subject to taxation in the U.S., Malaysia and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years endedDecember 31, 2001 through 2006, 2008, 2009 and 2012 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at theState level, tax years ended 2008, 2009 and 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examinationby the Malaysia Inland Revenue Board.Income taxesDeferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and aremeasured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits ofNOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuationallowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a taxstrategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based onan evaluation in accordance with the accounting standards, as of December 31, 2021 and 2020, a valuation allowance has been recorded against the net U.S. andMalaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all theavailable evidence.Use of estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimatesand those differences could be material.Other comprehensive lossComprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from nonowner sources. Comprehensiveloss includes net loss and other nonowner changes in equity that bypass the statement of operations and are reported in a separate component of equity.F15Net income (loss) per common shareBasic net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of common shares outstanding duringthe period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weightedaverage number of diluted common sharesoutstanding during the period. Diluted shares outstanding are calculated by adding to the weightedaverage shares (a) any outstanding stock options based on thetreasury stock method and (b) restricted stock units (“RSU”).Diluted net loss per common share was the same as basic net loss per common share for the years ended December 31, 2021 and December 31, 2020, because theeffects of potentially dilutive securities were antidilutive.New accounting pronouncements adoptedThe Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impactthe Company’s consolidated financial statements and related disclosures. 2. SEGMENT INFORMATIONRevenue is attributed by geographic region based on shipto location of the Company’s customers. The following table summarizes revenue by geographicregion:Year EndedDecember 31,20212020(in thousands)North America$3,671$3,189Asia349405Other4122Total revenue$4,061$3,616The following table summarizes sales by product type:Year EndedDecember 31,20212020(in thousands)Optical$4,061$3,611Core5Total revenue$4,061$3,616All of our assets were located in the United States for the years ended December 31, 2021 and 2020.F163. INVESTMENTSThe Company invests available cash primarily in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, commonstock, equity related securities and corporate notes. Investments classified as availableforsale debt securities are carried at fair value with unrealized gains andlosses recorded in accumulated other comprehensive income/(loss). Investments in equity securities are reported at fair value, with both realized and unrealizedgains and losses recorded as unrealized gain/(loss) on investments and realized gain on investments, in other income/(expense), in the Consolidated Statements ofOperations. Investments in which the Company has the ability and intent, if necessary, to liquidate are classified as shortterm.The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,751$ $ $14,751Total shortterm investments$14,751$$$14,751The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2020:GrossGrossAmortizedunrealizedunrealizedFaircostgainslossesvalue(in thousands)Shortterm investments:U.S. Treasury securities$14,748$ $ $14,748Total shortterm investments$14,748$$$14,748The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchybased on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are thefollowing:●Level 1—Quoted prices in active markets for identical assets or liabilities.●Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assetsor liabilities.●Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company’s fixed income availableforsale securities consist of U.S. Treasury securities, highquality investment grade commercial paper, FDIC guaranteedcertificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors,who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly(Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputswere derived from nonbinding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricingmodels, such as discounted cash flow techniques.F17The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,137$$ $3,137Investments:Availableforsales securities—current:U.S. Treasury securities14,75114,751Total$3,137$14,751$$17,888The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2020:Level 1Level 2Level 3Total(in thousands)Cash equivalents:Money market funds$3,136$$$3,136Investments:Availableforsales securities—current:U.S. Treasury securities14,74814,748Total$3,136$14,748$$17,884There are no terms or conditions restricting the Company from redeeming any of its investments.In addition to the debt securities noted above, the Company had approximately $8,100,000 and $8,000,000 of time deposits included in cash and cashequivalents as of December 31, 2021 and 2020, respectively.4. DISCONTINUED OPERATIONS: Closure of Direct Dose RxOn June 24, 2021, the Company’s Board of Directors decided effective immediately, to close its pharmacy operations dba Direct Dose Rx. Immediatelythereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a startup pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costsassociated with such closure will be material. Based on the Company’s review and analysis of ASC 20520 Presentation of Discontinued Operations it concluded topresent the discontinued operations separately.Year EndedDecember 31,20212020(in thousands)Revenues (discontinued operations)$370$851Operating Expense (discontinued operations)6411,191Loss from operations of discontinued operations, net of taxes$(271)$(340)F185. SIGNIFICANT CUSTOMERSFor the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuingoperations. For the year ended December 31, 2020, the Company had four customers that accounted for approximately 21%, 13%, 11%, and 10% of its revenue fromcontinuing operations.Customers individually representing more than 10% of trade receivables accounted for approximately 80% and 44% of accounts receivable as of December 31,2021 and 2020, respectively. 6. ASSETS HELD FOR SALE AND LONGLIVED ASSETSWhen circumstances, such as adverse market conditions, indicate that the carrying value of a longlived asset may be impaired, the Company performs ananalysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expectedfuture operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects ofdemand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized tothe extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume thehighest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible atthe measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In connection with the Company’s decision in 2016 to limit its focus to the optical and industrial sapphire markets and exit the LED market, the Companydeveloped a plan to close its Malaysia facility, scale down and consolidate remaining operations in the U.S. and sell additional assets that would not be needed. TheCompany evaluated its U.S. and Malaysia asset portfolios to identify assets needed for its current business strategy and excess assets that were no longer needed.The Company determined it had excess machinery, equipment and facilities. Excess U.S. and Malaysia assets were evaluated based on assuming an orderlyliquidation plan, which considers economic obsolescence and sales of comparable equipment, as it is the Company’s intention to sell these assets. Additionally, theCompany evaluated its U.S. assets continuing to be used in operations using a cost and market approach to determine the current fair value.In the year ended December 31, 2019, we completed the sale of the remaining excess equipment located in Malaysia for total consideration of $490,000. Suchequipment had a total net book value of $188,000, thereby resulting in a gain on disposal of $302,000.The Company entered into an agreement for the sale of its Malaysian facility in December 2019, which was completed in June 2020.In June 2020, the Company completed the sale of its Malaysian facility for a net sale price of approximately $4,800,000 (based on the exchange rate on June 30,2020 of $1=MYR4.27) after the payment of consent fees, real estate taxes, brokerage and legal fees, transfer and other expenses. The Company recorded a gain onthe disposal of the Malaysian facility of approximately $1,800,000.In December, 2020, the Company completed the sale of all of the outstanding shares of capital stock (the “Capital Shares”) of its wholly owned subsidiaryRubicon Sapphire Technology (Malaysia) SDN. BHD. The company recorded a gain on the sale of $261,000.On February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.F197. STOCKHOLDERS’ EQUITYCommon stockAt the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amendedand Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii)decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstandingimmediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware aCertificate of Amendment to (a) implement the reverse stock split at a ratio of 1for10; and (b) to reduce the number of authorized shares of common stock from40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split,the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. Theshare information has been retroactively reflected for the effects of this reverse stock split for all periods presented.Preferred stockAt the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate ofIncorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with theSecretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number oftotal authorized shares from 13,200,000 to 9,200,000.Common shares reservedAs of December 31, 2021, the Company had reserved 32,080 shares of common stock for issuance upon the exercise of outstanding common stock options andvesting of RSUs. Also, 304,731 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equityinstruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2021. 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the“Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potentialfuture federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Companyexperiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement isintended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval ofthe Company’s Board of Directors (the “Board”).The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable tostockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stockissued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms,provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Companyone onethousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for apurchase price of $40.00. If issued, each onethousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, votingand liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company,including, without limitation, any dividend, voting or liquidation rights.F20The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” byacquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of theoutstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stockrepresenting 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on theoutstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficiallyowns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as anyperson becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in suchperson becoming an Acquiring Person (the “Distribution Date”).Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidencethe Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date,separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stockunless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below).In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficiallyowned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchaseprice, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market valueequal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company.In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transactionin which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company isthe surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold ortransferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, commonstock of the acquiring company having a value equal to two times the purchase price.At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an AcquiringPerson or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of theexistence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemptionof the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon anyredemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in wholeor in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of theCompany’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange ofany Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (orfractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences andprivileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio.Each one onethousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock theCompany may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amountper share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’scommon stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal toaccrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) willentitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged viamerger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit ofSeries A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.F21The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the RightsAgreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the RightsAgreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Boarddetermines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, thatthe Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders.The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstandingRights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series APreferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1%of the purchase price.For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval ofthe holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure anambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company maydeem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or anyAffiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreementagain becoming amendable other than in accordance with this sentence.In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Companyfiled the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017.9. STOCK INCENTIVE PLANSIn August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the“2007 Plan”), and which allowed for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, RSUs, performanceawards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Planentitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of thecommon stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’sstockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, nonstatutory stock options,stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. Thecommittee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may beexercised.Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan thatsubsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Planwill automatically terminate on March 17, 2026, unless the Company terminates it sooner.F22The following table summarizes the activity of the stock incentive and equity plans:Sharesavailablefor grantNumber ofoptionsoutstandingWeightedaverageoptionexercise priceNumber ofrestrictedstock sharesissuedNumber ofRSUsoutstandingOutstanding at January 1, 2020276,38622,839$13.4899,57054,003Granted(24,627)7,347Exercised/issued(2,250)(3,597)Canceled/forfeited40,596(489)202.56(9,000)Outstanding at December 31, 2020292,35520,1009.7199,57048,753Granted(59,580)28,030Exercised/issued(15,000)6.10(3,750)Canceled/forfeited71,956(1,050)44.10(45,003)Outstanding at December 31, 2021304,7314,050$14.1699,57028,030There were no option grants made during 2021. At December 31, 2021, the exercise prices of outstanding options were as follows:Exercise priceNumber ofoptionsoutstandingAverageremainingcontractual life(years)Number ofoptionsexercisable$6.10 $8.343,2505.163,250$44.108002.948004,0503.204,050There were no options that became vested in the year ended 2021. The aggregate grant date fair value of the options that became vested in the year ended 2020was $30,000.The following table summarizes the activity of nonvested options:NonvestedoptionsWeightedaverageoptionexercisepriceNonvested at January 1, 20204,866$6.10GrantedVested(4,866)6.10CancelledNonvested at December 31, 2020GrantedVestedCancelledNonvested at December 31, 2021$The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of theCompany’s common stock. Based on the fair value of the common stock at December 31, 2021 there was $7,000 of intrinsic value arising from 4,050 stock optionsexercisable or outstanding.F23The Company used historical stock prices as the basis for its volatility assumptions. The assumed riskfree rates were based on U.S. Treasury rates in effect atthe time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2021, is based upon the Company’smedian average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straightline method.For the year ended December 31, 2021, there was no recorded stock option compensation expense. As of December 31, 2021, there were no options granted, and alloutstanding options awarded have been fully vested. For the year ended December 31, 2020, the Company recorded $14,000 of stock option compensation expense.The following table summarizes the award vesting terms for the RSUs granted in 2021:Number of RSUsTarget price12,500$12.0012,500$13.00The RSUs vest in the amounts set forth below on the first date the 15trading day average closing price of the Company’s common stock equals or exceeds thecorresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stockwas $9.20. During the twelve months ended December 31, 2021, neither tranche vested.The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based uponachievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs:GrantedDecember 2021Daily expected stock price volatility2.1383%Daily expected dividend yield0.0%Average daily riskfree interest rate0.0039%The daily expected stock price volatility is based on a fouryear historical volatility of the Company’s common stock. The daily expected dividend yield is basedon annual expected dividend payments. The average daily riskfree interest rate is based on the threeyear treasury yield as of the grant date. Each of the tranches iscalculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is upto four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year endedDecember 31, 2021.F24A summary of the Company’s RSUs is as follows:RSUsoutstandingWeightedaverageprice attime of grantAggregateintrinsicvalueNonvested RSUs as of January 1, 202054,003$6.56Granted7,3478.34Vested(3,597)8.34Cancelled(9,000)8.36Nonvested RSUs as of December 31, 202048,7536.34Granted28,0309.90Vested(3,750)8.00Cancelled(45,003)7.45Nonvested RSUs at December 31, 202128,030$7.28$204,062The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or theexpected achievement of market price targets based on the Monte Carlo simulation model. For the years ended December 31, 2021 and 2020, the Company recorded$30,000 and $38,000 of RSU expense, respectively. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partialvesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the nonvested RSUs.This cost will be recognized by the Company over a service period that was derived from the statistical valuation methods used to estimate the fair value of theRSUs at grant date.For the years ended December 31, 2021 and December 31, 2020, the Company recorded no compensation related to restricted stock. During the year endedDecember 31, 2020 the Company awarded approximately 17,000 shares to an officer of the Company with a fair value of $146,000.10. INCOME TAXESOn December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed theCompany to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date ofenactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from$3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to therefinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact ofthe increase of the deemed repatriation tax.Components of income before income taxes and the income tax provision are as follows:Income (loss) before income taxesYear EndedDecember 31,20212020(in thousands)U.S.$(730)$(3,060)Foreign02,010Total$(730)$(1,050)F25Income taxesYear EndedDecember 31,20212020(in thousands)CurrentU.S.$0$0State00Foreign013Total current income tax expense013DeferredU.S.00State00Foreign00Total deferred income tax expense (benefit)00Total income tax expense (benefit)$0$13The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows:Year EndedDecember 31,20212020U.S. federal statutory rate(21.0)%(21.0)%State taxes net of federal benefit(6.9)(18.2)Foreign rate differential and transactional tax0.05.9Tax credits0.00.0Valuation allowance27.933.3Other0.01.00.0%1.0%Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31:20212020(in thousands)Deferred tax assets:Allowance for doubtful accounts$5$1Inventory reserves3,0333,096Consumables excess reserve162167Accrued liabilities15581Warrant interest expense195195Stock compensation expense775789State net operating loss13,35814,476Net operating loss carryforward39,59741,105Capital loss carryforward6,755Tax credits669710Depreciation4231,000Valuation allowance(65,079)(61,556)Total deferred tax assets4764Deferred tax liability:Prepaid expenses(47)(64)Net deferred tax liability$0$0F26In February 2018, the FASB issued ASU No. 201802 (“ASU 201802), Income StatementReporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Comprehensive Income. The new guidance allows companies to reclassify stranded tax effects resulting from the Tax Act,from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. Early adoption ispermitted. The Company’s adoption of ASU 201802 did not have a material impact on its consolidated financial statements.The Company adopted the guidance in ASU No. 201517, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that alldeferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in the balance sheet. As a result, each jurisdiction has onenet noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting within a jurisdiction.Companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The change inaccounting principle did not have an impact on the Company’s results of operations, cash flows or stockholders’ equity. At December 31, 2021, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $655,000, respectively. The Federal andIllinois NOLs began to expire in 2021 and the Indiana NOL will begin to expire in 2039. With the adoption of ASU 201609 in 2017, we recorded a deferred tax assetrelated to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offsetby the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred taxassets reported in the financial statements. In addition, at December 31, 2021, we had Federal research and development credits of $662,000, which will begin toexpire in 2028.The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2021. The results ofthis analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. At December 31, 2021 and 2020, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a taxreturn that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is notreasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during theyear ended December 31, 2021.There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2021 and 2020.The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations inMalaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 havebeen audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open toexamination by tax authorities.The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with nochanges made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have beenaudited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards,tax years ended December 31, 2006, 2008, 2009 and 2011 through 2020 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards atthe State level, tax years ended 2012 through 2020 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by theMalaysia Inland Revenue Board.Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitelyreinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principaltowards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. At December 31, 2021 and 2020,the Company accrued the withholding tax on the interest balance of the loan in the amount of $0 and $13,000, respectively, which represents the incremental tax.F2711. COMMITMENTS AND CONTINGENCIESCOVID19 PandemicIn March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID19) as a pandemic. The full impact of the COVID19outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID19 outbreak, as well as other factors, could result in a materialimpact to the Company’s financial statements in future reporting periods.Operating LeasesThe Company adopted ASU 201602 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 201602 did not have a material impacton the Company’s consolidated financial statements, as the Company does not have any material lease agreements Rubicon DTP leases a building for itsmanufacturing and offices, however such lease was not considered material to the Company’s financial statements.Direct Dose’s net rent expense under operating leases in 2021 and 2020 amounted to $26,784 and $34,200, respectively. On January 6, 2021, Direct Dose enteredinto a one year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. As ofDecember 31, 2020, Direct Dose’s operating lease for its facility was monthtomonth.LitigationFrom time to time, the Company experiences routine litigation in the ordinary course of its business.There are no outstanding material matters as of December 31, 2021 and through the date of this filing.12. BENEFIT PLANThe Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees makecontributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the yearsended December 31, 2021 and 2020.13. SUBSEQUENT EVENTSOn February 7, 2022, we entered into a real estate sale contract to sell our parcel of land in Batavia, Illinois for $722,000 and expect our net proceeds, if the sale isconsummated, after the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately $600,000.The closing of the sale of the Property is subject to certain conditions precedent. There is currently no anticipated closing date.During February and March 2022, the Company settled liabilities that were accrued in prior years resulting in a gain of approximately $200,000.F28EX21.1 2 f10k2021ex211_rubicontech.htm SUBSIDIARIES OF THE COMPANYExhibit 21.1Rubicon Technologies, Inc.Subsidiaries of the CompanyName of subsidiaryState (or other jurisdiction of incorporation)Rubicon Technology Worldwide LLCIllinoisRubicon Technology BP LLCDelawareRubicon DTP LLCDelawareEX23.1 3 f10k2021ex231_rubicontech.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMExhibit 23.1INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENTWe consent to the incorporation by reference in the Registration Statements of Rubicon Technology, Inc. on Form S3 (File No. 333167272), as amended (File No.333192536) and on Forms S8 (File No. 333147552, File No. 333180211 and File No. 333213025) of our report dated March 25, 2022 with respect to our audits of theconsolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for each of the two years in the period endedDecember 31, 2021, which report is included in this Annual Report on Form 10K of Rubicon Technology, Inc. and Subsidiaries for the year ended December 31, 2021./s/ Marcum LLPMarcum LLPChicago, IllinoisMarch 25, 2022EX31.1 4 f10k2021ex311_rubicontech.htm CERTIFICATIONExhibit 31.1CertificationsCertification pursuant to Section 302 of the SarbanesOxley Act of 2002I, Timothy E. Brog, certify that:1.I have reviewed this Annual Report on Form 10K of Rubicon Technology, Inc. (the “registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internalcontrol over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have:a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of theregistrant’s board of directors (or persons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief ExecutiveOfficer, and Acting Chief Financial OfficerEX32.1 5 f10k2021ex321_rubicontech.htm CERTIFICATIONExhibit 32.1Certification Pursuant to Section 906 of The SarbanesOxley Act of 2002,18 U.S.C. Section 1350In connection with the Annual Report of Rubicon Technology, Inc. (the “Company”) on Form 10K for the year ended December 31, 2021, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Timothy E. Brog, , Director, President, Chief Executive Officer and Acting Chief FinancialOfficers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that, to my knowledge:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 25, 2022By:/s/ Timothy E. BrogTimothy E. BrogDirector, President, Chief Executive Officer,and Acting Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to theSecurities and Exchange Commission or its staff upon request.

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