Financial Data and Key Metrics Changes - The GAAP net loss for Q1 2025 was $5.2 million or $0.17 per share, compared to a net loss of $4.8 million or $0.19 per share in Q1 2024 [21] - GAAP operating expenses in Q1 2025 were $5.5 million, an increase of $448,000 from $5 million in Q1 2024 [21][22] - Non-GAAP net loss in Q1 2025 was $4.4 million compared to a loss of $4 million in Q1 2024 [22] - Cash, cash equivalents, and short-term investments as of March 31, 2025, were $24.1 million, down from $26.8 million on December 31, 2024 [24] Business Line Data and Key Metrics Changes - The partnership with a major capital equipment provider aims to enhance the development and production of advanced material solutions, particularly in gate-all-around technology [4][5] - Significant progress has been made in gate-all-around applications, generating detailed silicon-validated performance enhancement data for customers [9] - New patents focused on DRAM sense amplifiers have been granted, relevant for both high bandwidth and standard DDR memories [9] Market Data and Key Metrics Changes - The epi equipment market is expected to reach approximately $2.6 billion by 2027, with a CAGR of 10% to 15% in leading-edge nodes [9] - The market for gallium nitride (GaN) applications is forecasted to exceed $2 billion at the device level by the end of the decade, growing at about a 40% CAGR [17] Company Strategy and Development Direction - The company is focused on expanding its technology licensing business within the semiconductor industry, particularly in areas related to AI infrastructure and advanced semiconductor applications [20] - The partnership with the capital equipment provider is expected to accelerate the closing of license deals and enhance the company's market position [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning to deliver solutions for challenging electronic devices, emphasizing the importance of technology and relationships with large semiconductor companies [26] - The company is actively recruiting for its engineering and sales teams to support the transition to high-volume production and to close deals [20] Other Important Information - The company raised $2.4 million under its ATM facility by selling approximately 163,000 shares at an average price of $15.19 [24] - Non-GAAP operating expenses for 2025 are expected to be in the range of $17.25 million to $17.75 million [25] Q&A Session Summary Question: Can you provide details about the partnership with the capital equipment provider? - The partnership involves a long-term relationship with a major equipment provider, focusing on gate-all-around technology and leveraging their capabilities for testing and production [30][34] Question: What is the focus of the work with STMicro? - The work with STMicro is focused on optimizing manufacturability, yield, and throughput in preparation for high-volume manufacturing, with discussions ongoing in multiple product areas [12][40] Question: What is the status of the transformative customers mentioned in previous calls? - Discussions with transformative customers are ongoing, with one customer moving faster than expected and showing significant interest in expanding the scope of work [51][70] Question: What are the implications of the restated employment agreement? - The restated agreement aimed to correct a mistake regarding severance upon change of control, with no significant implications beyond that [66] Question: How are the electrical results from Sandia Lab? - The electrical results show improved device performance, consistent with previous observations of material quality improvements [72]

Financial Data and Key Metrics Changes - The GAAP net loss for Q1 2025 was $5.2 million or 17¢ per share, compared to a net loss of $4.8 million or 19¢ per share in Q1 2024 [21] - GAAP operating expenses in Q1 2025 were $5.5 million, an increase of $448,000 from $5 million in Q1 2024 [21] - Non-GAAP net loss in Q1 2025 was $4.4 million compared to a loss of $4 million in Q1 2024 [22] Business Line Data and Key Metrics Changes - The increase in operating expenses was attributed to a $397,000 rise in R&D expenses and a $277,000 increase in G&A expenses, partially offset by a $226,000 decline in sales and marketing expenses [22] - The company is actively working on multiple technology areas, including gate all around applications and memory technologies, with significant progress reported in customer engagements [10][14] Market Data and Key Metrics Changes - The EPI equipment market is expected to reach approximately $2.6 billion by 2027, with a CAGR of 10% to 15% in leading-edge nodes [10] - The market for gallium nitride (GaN) applications is forecasted to exceed $2 billion at the device level by the end of the decade, growing at about a 40% CAGR [17] Company Strategy and Development Direction - The company has announced a partnership with a major capital equipment provider to enhance its technology offerings and accelerate customer engagements [4][9] - The focus on advanced node customers and the collaboration with the equipment provider aims to optimize production processes and improve customer solutions [5][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning to deliver solutions for challenging electronic devices, emphasizing the importance of technology licensing within the semiconductor industry [20] - The company is actively recruiting to expand its engineering and sales teams to support growth and high-volume production [20] Other Important Information - The company raised $2.4 million under its ATM facility by selling approximately 163,000 shares at an average price of $15.19, maintaining a comfortable cash position [23] - Non-GAAP operating expenses for 2025 are expected to be in the range of $17.25 million to $17.75 million [25] Q&A Session Summary Question: Details on the partnership with the capital equipment company - The partnership involves extensive collaboration on technology development and production, with the partner providing significant resources and capabilities [32] Question: Focus of the partnership - The work is primarily focused on gate all around technologies, applicable to both logic and memory sectors [33] Question: Updates on STMicro collaboration - The company is engaged in discussions with multiple groups within STMicro, indicating strong credibility and interest in various technology areas [36][38] Question: Progress with RF SOI customers - There is increased interest in improving low noise amplifiers (LNAs) due to changing specifications from mobile phone manufacturers [43] Question: Status of transformative customers - Discussions with transformative customers are ongoing, with positive momentum and interest in expanding collaboration [49] Question: Financial outlook and operating expenses - Non-GAAP operating expenses for 2025 are projected to be around $17.25 million to $17.75 million, with a gradual ramp-up expected [54]

Financial Performance - The company reported a net loss of $5.2 million, or $0.17 per share, for Q1 2025, compared to a net loss of $4.8 million, or $0.19 per share, in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was a loss of $4.4 million, compared to a loss of $4.0 million in Q1 2024[4] - Total revenue for Q1 2025 was $4,000, compared to $18,000 in Q1 2024, reflecting a significant decrease[16] - Operating expenses increased to $5.5 million in Q1 2025 from $5.0 million in Q1 2024, primarily driven by R&D and administrative costs[16] - The accumulated deficit as of March 31, 2025, was $226.7 million, up from $221.5 million at the end of 2024[14] Cash Position - Cash and cash equivalents decreased to $24.1 million as of March 31, 2025, down from $26.8 million as of December 31, 2024[5] - The total number of shares outstanding was 30.7 million as of March 31, 2025[6] Strategic Initiatives - The company signed a strategic marketing agreement with a leading chip fabrication equipment vendor to enhance deal execution and drive license revenues[3] - The company expanded engagements with STMicroelectronics and RF SOI customers to new applications, indicating growth opportunities[8] - The company built its first MST-enabled GaN devices at Sandia and began electrical testing, showcasing advancements in technology[8]

Revenue and Financial Performance - Revenue for the year ended December 31, 2024 was approximately $135,000, a decrease from $550,000 in 2023, primarily due to limited customer engagements [132]. - The company incurred a net loss of approximately $18.4 million for the year ended December 31, 2024 [142]. - Interest income increased to approximately $779,000 in 2024 from $723,000 in 2023, attributed to higher interest rates and cash balances [139]. - As of December 31, 2024, the company had cash, cash equivalents, and short-term investments of approximately $26.8 million [142]. - The company sold approximately 4.1 million shares at an average price of approximately $5.38, resulting in approximately $21.3 million of net proceeds in 2024 [143]. Expenses - Cost of revenue increased to approximately $123,000 in 2024 from $28,000 in 2023, reflecting the costs associated with integration engineering services [133]. - Operating expenses totaled approximately $19.3 million in 2024, a decrease from $21.2 million in 2023 [134]. - Research and development expenses decreased by approximately $1.5 million, or 12%, to $11.0 million in 2024 from $12.5 million in 2023 [136]. - General and administrative expenses increased by approximately $191,000, or 3%, to $7.3 million in 2024 from $7.1 million in 2023 [137]. - Selling and marketing expenses decreased by approximately $546,000, or 34%, to $1.1 million in 2024 from $1.6 million in 2023 [138]. Accounting and Financial Reporting - Financial statements are prepared in accordance with U.S. generally accepted accounting principles, requiring significant estimates and assumptions that could lead to actual results differing from reported amounts [151]. - Leases greater than 12 months result in the recognition of a right-of-use (ROU) asset and a liability at the lease commencement date based on the present value of lease payments [152]. Stock-Based Compensation - Stock-based compensation programs include restricted stock awards (RSAs) and stock options, with expenses based on the fair values of the equity instruments issued [153]. - The fair value of RSAs is measured at the market price of common stock on the measurement date and amortized over the vesting period [153]. - The expected term for employee stock awards is derived from historical information regarding future exercise patterns and behavior after employment termination [155]. - Expected volatility for stock options is estimated using the company's historical volatility for similar terms [155]. - The company has not declared or paid dividends and assumes an expected dividend yield of 0% [155]. - The risk-free interest rate for stock options is based on U.S. Treasury securities yields with maturities similar to the expected terms of the associated awards [155].

Financial Data and Key Metrics Changes - Revenue for 2024 was $135,000, consisting of MST CAD licensing and NRE fees, compared to $550,000 in Q4 2023 [39] - GAAP net loss for 2024 was $18.4 million or $0.68 per share, an improvement from a net loss of $19.8 million or $0.80 per share in 2023 [39] - GAAP operating expenses decreased to $19.3 million in 2024 from $21.2 million in 2023, primarily due to a $1.5 million reduction in R&D expenses [39][40] - Cash, cash equivalents, and short-term investments increased to $26.8 million at the end of 2024 from $19.5 million at the end of 2023 [41] Business Line Data and Key Metrics Changes - The company reported a decline in sales and marketing expenses by $546,000 due to lower headcount costs, while G&A expenses increased by $191,000 due to higher payroll and legal costs [39] - Non-GAAP net loss for 2024 was $15.4 million, down from $16.6 million in 2023, reflecting a decrease in non-GAAP operating expenses [41] Market Data and Key Metrics Changes - The market for gate-all-around architecture is valued at approximately $150 billion in 2023, with significant opportunities in advanced logic IDMs and foundries [15] - The memory segment is projected to be worth over $125 billion in 2024, with a focus on low production costs [19] - The power semiconductor market is expected to exceed $52 billion in 2024, driven by AI and vehicle electrification [23] Company Strategy and Development Direction - The company aims to solidify its value proposition in four major high-growth semiconductor markets while exploring new opportunities for faster revenue generation [33] - The focus on gate-all-around and memory technologies aligns with the industry's push towards AI infrastructure [36] - The company is enhancing its R&D pipeline, with over 30 granted and pending patents in 2024 [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for MST technology to drive performance improvements in semiconductors, particularly in AI applications [15][36] - The company is hopeful for the resumption of discussions with a transformative customer, emphasizing the value of their technology [12][14] - Management acknowledged the challenges in negotiations but remains confident in the long-term adoption of their technology [52][54] Other Important Information - The company plans to announce when it enters process qualification with STMicro, which will lead to recognizing license revenue [26] - The company raised approximately $21.3 million through the sale of shares under its ATM facility in 2024 [42] Q&A Session Summary Question: Dynamics of the transformative opportunity - Management confirmed that the sticking points in negotiations are not solely pricing but involve multiple decision-makers within the customer organization [50][52] Question: Progress with leading-edge logic and memory - Management noted increased engagement with advanced node and memory customers, highlighting the industry's shift towards gate-all-around technology [58][60] Question: Update on GaN progress - Management indicated that GaN is a new area with significant interest, and they expect to have electrical results soon that could lead to customer engagements [66][70] Question: STMicro process qualification timeline - Management explained that there has been a delay in the process due to logistics issues, but they are optimistic about moving forward soon [76][78] Question: Current stage of collaboration with DRAM customers - Management confirmed ongoing engagement with multiple memory customers, emphasizing the importance of high bandwidth memory for AI infrastructures [111][112]

February 11, 2025 Atomera Incorporated 1 Q4 2024 Conference Call Atomera Incorporated 2 Mears Silicon Technology (MST®) Quantum Engineered Materials Transistor enhancement technology for the $600B semiconductor market High Leverage IP Licensing Business Model Top Tier Management Team Safe Harbor This presentation contains forward-looking statements concerning Atomera Incorporated (""Atomera," the "Company," "we," "us," and "our"). The words "believe," "may," "will," "potentially," "estimate," "continue," "a ...

Financial Performance - The company reported a net loss of $4.7 million, or $0.16 per share, in Q4 2024, compared to a net loss of $4.6 million, or $0.17 per share, in Q3 2024[4]. - For fiscal year 2024, revenue was $135,000, a significant decrease from $550,000 in fiscal 2023, while the net loss was $18.4 million, or $0.68 per share, compared to a net loss of $19.8 million, or $0.80 per share, in fiscal 2023[5]. - Adjusted EBITDA for Q4 2024 was a loss of $3.9 million, consistent with the loss in Q3 2024, and compared to a loss of $3.7 million in Q4 2023[4]. - The company reported total operating expenses of $19.3 million for fiscal 2024, down from $21.2 million in fiscal 2023[15]. - The accumulated deficit increased to $221.5 million as of December 31, 2024, from $203.1 million in the previous year[14]. Cash and Investments - The company had $26.8 million in cash, cash equivalents, and short-term investments as of December 31, 2024, an increase from $19.5 million as of December 31, 2023[6]. - The total number of shares outstanding was 30.1 million as of December 31, 2024[7]. Business Development - The company is making progress toward commercialization at ST Microelectronics and has expanded offerings for gate-all-around products, which are crucial for advanced AI devices[8]. - Development efforts have been initiated with two large customers, indicating potential future revenue growth[8]. - The semiconductor industry is viewed as being in an ideal state for adopting new technologies, which may benefit the company's MST technology[3].

Company Overview - Atomera is focused on transistor enhancement technology for the $600 billion semiconductor market[5] - The company utilizes a high leverage IP licensing business model[5] - Atomera is working with 50% of the world's top semiconductor makers[7] Technology and Validation - MST technology focus areas include Power, RF-SOI, Advanced Nodes, and DRAM[5] - X-ray confirms crystal quality improvement with MST, showing a 14% reduction in AlN (002) and a 13% reduction in GaN (002)[6] - Collaboration with Sandia's CINT validates MST benefits[6] Financial Performance (Q3 2024) - Net loss for the quarter was $4595 thousand, or $0.17 per share[8] - Adjusted EBITDA for the quarter was $(3881) thousand, or $(0.14) per share[8] - Cash, equivalents, and short-term investments totaled $17342 thousand[8]

Financial Data and Key Metrics Changes - The GAAP net loss for Q3 2024 was $4.6 million, or $0.17 per share, compared to a net loss of $5 million, or $0.20 per share, in Q3 2023 [29] - Revenues were $22,000 in Q3 2024, down from $72,000 in Q2 2024, and up from $0 in Q3 2023 [30] - GAAP operating expenses were $4.8 million in Q3 2024, a decrease of approximately $534,000 from $5.4 million in Q3 2023 [30] Business Line Data and Key Metrics Changes - The company is engaged in multiple technology segments, including MST for power chips, advanced node work for gate-all-around transistors, memory segment, and RF-SOI [7][13][16][19] - The power semiconductor market is expected to exceed $52 billion in 2024, with significant opportunities for Atomera's MST technology [7] - The advanced node market is valued at approximately $150 billion in 2023, with a shift towards materials engineering solutions [13] Market Data and Key Metrics Changes - The memory segment is valued at over $110 billion in 2023, focusing on low production costs and smaller node sizes [16] - The RF-SOI segment is also highlighted as having excellent potential for Atomera's technology [19] Company Strategy and Development Direction - Atomera is focusing on expanding its customer base and technology applications, particularly in the power semiconductor and advanced node markets [7][13] - The company is optimistic about converting proposals into JDAs or license agreements in the near future [20] - The strategy includes a land and expand approach with existing customers, particularly with STMicroelectronics [80] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the current momentum and customer engagement, indicating a strong demand for Atomera's technology [24][27] - The company is optimistic about the potential for its technology in the GaN market, which is expected to convert to revenue faster than traditional business [23][28] - Management noted that the rollout of AI infrastructure is a significant driver for the semiconductor industry, aligning with Atomera's technology [28] Other Important Information - The company is in the planning process for 2025, expecting to increase investments in sales and marketing [38] - Atomera is pursuing funding opportunities under the CHIPS Act, with a proposal submitted related to GaN and other compound semiconductors [39][40] Q&A Session Summary Question: Can you provide more detail on the transformative situation mentioned? - Management described it as a large customer with significant revenue potential that could enhance the company's financial position [44] Question: What is the progress with other customers in the funnel? - Management indicated that customers are in various phases, with some in active experiments and others having technology installed in their fabs [48] Question: What is the update on RF-SOI technology? - Management noted progress with thinner wafers and ongoing work with customers, but no announcements yet [54] Question: Is the work in the 7 to 48-volt range specific to data centers? - Management confirmed that the 48-volt work is primarily tied to data centers, with modifications made to SPX technology for this range [71][73] Question: How is the relationship with STMicroelectronics progressing? - Management reported a strong relationship with ST, with ongoing work and potential for expanding business into multiple units [80]

PART I. Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed financial statements for the period ended September 30, 2024, showing a net loss of $13.8 million and decreased total assets, supported by ATM stock offering proceeds [Condensed Financial Statements](index=3&type=section&id=Condensed%20Financial%20Statements) Financial statements show continued net loss of $13.8 million on minimal revenue, with assets declining and financing activities offsetting operational cash use Condensed Balance Sheet (in thousands) | Balance Sheet Items | Sep 30, 2024 (Unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $13,757 | $12,591 | | Total current assets | $17,792 | $20,404 | | **Total assets** | **$20,140** | **$24,029** | | Total current liabilities | $3,386 | $3,814 | | **Total liabilities** | **$4,247** | **$5,859** | | **Total stockholders' equity** | **$15,893** | **$18,170** | Condensed Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $22 | $0 | $112 | $0 | | Total operating expenses | $4,811 | $5,353 | $14,466 | $15,880 | | Loss from operations | ($4,789) | ($5,353) | ($14,464) | ($15,880) | | **Net loss** | **($4,595)** | **($5,039)** | **($13,778)** | **($15,210)** | | Net loss per share, basic & diluted | ($0.18) | ($0.20) | ($0.52) | ($0.62) | Condensed Statement of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($10,208) | ($11,649) | | Net cash provided by/(used in) investing activities | $3,476 | ($7,626) | | Net cash provided by financing activities | $7,898 | $10,733 | | **Net increase/(decrease) in cash** | **$1,166** | **($8,542)** | [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20Financial%20Statements) Notes detail Atomera's early-stage status, ATM reliance for liquidity, $17.3 million cash, $112 thousand revenue, and $7.2 million unrecognized stock compensation - As of September 30, 2024, the company had approximately **$17.3 million** in cash, cash equivalents, and short-term investments and believes it has sufficient capital to fund its plans for at least the next 12 months[17](index=17&type=chunk)[19](index=19&type=chunk) - During the nine months ended September 30, 2024, the company sold approximately **1.9 million shares** through its "at the market" (ATM) offering, raising net proceeds of about **$8.5 million**. As of quarter-end, approximately **$20.9 million** remained available under the ATM program[18](index=18&type=chunk) - Revenue for the nine months ended September 30, 2024, was **$112 thousand**, entirely from North America, with **$62 thousand** recognized over time and **$50 thousand** at a point in time. No revenue was recorded in the same period of 2023[32](index=32&type=chunk) - As of September 30, 2024, there was approximately **$7.2 million** of total unrecognized compensation expense related to unvested share-based arrangements, expected to be recognized over a weighted-average period of **2.8 years**[47](index=47&type=chunk) [Management's Discussion and Analysis (MD&A)](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A focuses on MST technology commercialization via licensing, highlighting the ST Microelectronics agreement, decreased operating expenses, and reliance on ATM for liquidity [Business Overview & Strategy](index=17&type=section&id=Business%20Overview%20%26%20Strategy) Atomera's strategy involves licensing Mears Silicon Technology (MST) for revenue, with a key ST Microelectronics agreement currently in process qualification - The company's commercialization strategy is to generate revenue through licensing arrangements, where customers pay a license fee and a royalty for each silicon wafer or device incorporating MST technology[58](index=58&type=chunk) - The license agreement with ST Microelectronics, signed in April 2023, is the company's first grant of commercial manufacturing and distribution rights. ST is currently performing testing to qualify the MST-enabled process, which, if successful, will lead to additional license fees and royalties[59](index=59&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Q3 2024 revenue was $22 thousand, with total operating expenses decreasing 17% to $4.8 million, primarily due to reduced R&D and selling/marketing costs Operating Expense Changes (Three Months Ended Sep 30, 2024 vs 2023) | Expense Category | Q3 2024 (approx. $M) | Q3 2023 (approx. $M) | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $2.8 | $3.3 | ▼ 17% | Decrease in outsourced R&D as foundry partner ceased services | | General & Administrative | $1.8 | $1.7 | ▲ 8% | Increased employee and patent legal costs | | Selling & Marketing | $0.25 | $0.37 | ▼ 32% | Reduction in headcount | - Revenue for Q3 2024 was approximately **$22 thousand**, derived from MSTcad licensing and related services. No revenue was recorded in the same period of 2023[63](index=63&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) Atomera held $13.8 million cash and $3.6 million investments, used $10.2 million in operations, raised $8.5 million via ATM, and expects sufficient capital for 12 months - The company had cash and cash equivalents of **$13.8 million** and short-term investments of **$3.6 million** as of September 30, 2024[82](index=82&type=chunk) - During the first nine months of 2024, the company raised approximately **$8.5 million** in net proceeds from its ATM offering. An additional **$1.6 million** was raised through the ATM after September 30, 2024[83](index=83&type=chunk) - Management believes that available working capital is sufficient to fund its forecasted requirements for at least the next 12 months[84](index=84&type=chunk) [Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2024[87](index=87&type=chunk) - No material changes were made to internal controls over financial reporting during the third quarter of 2024[88](index=88&type=chunk) PART II. Other Information [Key Disclosures](index=22&type=section&id=Key%20Disclosures) No material changes to risk factors from 2023 Annual Report; CTO Robert Mears adopted a Rule 10b5-1 trading plan for 18,530 shares - The primary risk factors affecting the business have not materially changed from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[90](index=90&type=chunk) - On September 10, 2024, Robert Mears, the Chief Technology Officer, adopted a Rule 10b5-1 trading plan for the potential sale of up to **18,530 shares**, set to expire on September 10, 2025[92](index=92&type=chunk)