[PART I. Financial Information](index=2&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements show Atomera as an early-stage company with limited revenue, recurring losses, and operations funded by equity financing Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $21,838 | $28,699 | | Total current assets | $22,488 | $29,008 | | Total assets | $28,782 | $36,060 | | Total current liabilities | $2,795 | $2,753 | | Total liabilities | $7,032 | $7,679 | | Total stockholders' equity | $21,750 | $28,381 | Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $0 | $375 | $400 | | Total operating expenses | $4,447 | $3,712 | $8,759 | $7,720 | | Loss from operations | ($4,447) | ($3,712) | ($8,465) | ($7,320) | | Net loss | ($4,481) | ($3,726) | ($8,567) | ($7,346) | | Net loss per share, basic & diluted | ($0.20) | ($0.17) | ($0.37) | ($0.33) | Condensed Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,615) | ($6,634) | | Net cash used in investing activities | ($19) | ($79) | | Net cash (used) provided by financing activities | ($227) | $3,112 | | Net decrease in cash and cash equivalents | ($6,861) | ($3,601) | - The company is an early-stage entity focused on developing, commercializing, and licensing proprietary technologies for the semiconductor industry, with limited revenue-generating activities to date[23](index=23&type=chunk) - As of June 30, 2022, the company had approximately **$21.8 million** in cash and cash equivalents, believed sufficient to fund operations for at least the next 12 months, supplemented by an At-The-Market (ATM) facility for up to **$50.0 million** established in May 2022[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - Subsequent to the quarter's end, as of August 1, 2022, the company issued an additional **235,050 shares** through its ATM offering, raising net proceeds of approximately **$2.6 million**[58](index=58&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's MST technology commercialization through licensing, noting a slight revenue decrease and a **14%** increase in operating expenses for the first six months of 2022 - The company's business model involves licensing its proprietary MST technology to foundries, IDMs, and fabless semiconductor companies, generating revenue from license fees and future royalties[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) Revenue Comparison (in thousands) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $0 | $0 | | Six Months Ended June 30 | $375 | $400 | Operating Expenses Comparison (in thousands) | Expense Category | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Research & development | $2,433 | $2,069 | $4,772 | $4,298 | | General & administrative | $1,667 | $1,506 | $3,315 | $3,019 | | Selling and marketing | $347 | $137 | $672 | $403 | | **Total Operating Expenses** | **$4,447** | **$3,712** | **$8,759** | **$7,720** | - The increase in R&D expense was primarily due to tool lease expenses, while selling and marketing expenses rose due to increased employee-related costs and outsourced marketing activities[71](index=71&type=chunk)[72](index=72&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - As of June 30, 2022, the company had **$21.8 million** in cash and cash equivalents and **$19.7 million** in working capital, which management believes is sufficient to fund operations for at least the next 12 months[82](index=82&type=chunk)[83](index=83&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=17&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable for the current reporting period - The company has indicated that this disclosure is not applicable[85](index=85&type=chunk) [Controls and Procedures](index=17&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal controls over financial reporting during the quarter - Based on an evaluation, management concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[86](index=86&type=chunk) - There were no changes during the quarter ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[87](index=87&type=chunk) [PART II. Other Information](index=18&type=section&id=PART%20II.%20Other%20Information) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the primary risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2021 - The primary risk factors have not changed materially from those set forth in the Annual Report on Form 10-K for the year ended December 31, 2021[90](index=90&type=chunk) [Exhibits](index=18&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and the Equity Distribution Agreement for the ATM offering - The list of filed exhibits includes Sarbanes-Oxley certifications (Exhibits 31.1, 31.2, 32.1) and the Equity Distribution Agreement with Oppenheimer & Co. Inc. and Craig-Hallum Capital Group LLC dated May 31, 2022 (Exhibit 10.1)[92](index=92&type=chunk) [Signatures](index=19&type=section&id=Signatures)

Financial Data and Key Metrics Changes - The GAAP net loss for Q1 2022 was $4.1 million or $0.18 per share, compared to a net loss of $3.6 million or $0.16 per share in Q1 2021 [20] - Revenue in Q1 2022 was $375,000, down from $400,000 in Q1 2021, with no revenue recognized in Q4 2021 [20] - GAAP operating expenses in Q1 2022 were $4.3 million, compared to $4 million in Q1 2021 [20] - The cash balance at March 31, 2022, was $24.5 million, down from $28.7 million at the end of 2021 [21] Business Line Data and Key Metrics Changes - The company has 19 customers and 25 engagements in its pipeline, including 2 joint development agreements (JDAs) and 5 paid licenses [11] - The first JDA resulted in a milestone payment recognized as revenue in Q1 2022, while the second JDA is expected to accelerate the path to commercialization [22] Market Data and Key Metrics Changes - The semiconductor industry is experiencing a 21% forecast growth in 200-millimeter fab capacity to address chip supply shortfalls [16] - Industry-wide capital expenditures are forecast to grow by 24% in 2022, primarily in 300-millimeter wafer fabs [17] Company Strategy and Development Direction - The company aims to ship MST-based products to generate royalty payments, with a focus on moving customers towards commercialization quickly [7][12] - The company is expanding its total addressable market (TAM) as it works with more customers and unveils new capabilities [24] Management's Comments on Operating Environment and Future Outlook - Management believes that the current semiconductor industry conditions present exceptional opportunities for the company, with both near and long-term structural changes favoring MST adoption [18] - The company is optimistic about the momentum gained from recent JDAs and the favorable macro environment for MST technology [24] Other Important Information - The company has developed MSTcad simulation software in collaboration with Synopsys to help industry players understand MST integration [13] - The company is focusing on RF-SOI technology, which is critical for 5G cellular applications, and sees significant commercial potential in this area [15] Q&A Session Summary Question: Can you describe the differences between the first and second JDAs? - The second JDA is focused on a specific business unit, allowing for potentially faster movement to production compared to the first JDA, which went through a central engineering group [27][28] Question: What is the timeline for the second JDA? - The timeline for the second JDA is expected to be faster than the first, which took nearly a year to start [70] Question: Are royalty rates already negotiated for the second JDA? - Final royalty rates have not been negotiated yet, but discussions about expected ranges have occurred [72][73] Question: What is the status of early licensees? - Most licensees are progressing towards getting technology into production, with one licensee currently facing operational challenges due to a facility issue [56] Question: How is the company addressing hiring challenges? - The company is focused on adding engineering headcount to meet customer demand, with hiring efforts expected to ramp up in the second half of the year [62][66]

Revenue - Revenue for Q1 2022 was $375,000, a decrease of 6.25% from $400,000 in Q1 2021[66] Cost of Revenue - Cost of revenue for Q1 2022 was approximately $81,000, compared to $0 in Q1 2021[66] Operating Expenses - Operating expenses for Q1 2022 totaled approximately $4.3 million, an increase of 7.5% from $4.0 million in Q1 2021[67] - Research and development expenses for Q1 2022 were approximately $2.3 million, a 5% increase from $2.2 million in Q1 2021[69] - General and administrative expenses for Q1 2022 were approximately $1.6 million, up 9% from $1.5 million in Q1 2021[70] - Selling and marketing expenses for Q1 2022 were approximately $325,000, an increase of 22% from $266,000 in Q1 2021[70] Cash Flow - Net cash used in operating activities for Q1 2022 was approximately $4.1 million, compared to $3.9 million in Q1 2021[72] - As of March 31, 2022, cash and cash equivalents were approximately $24.5 million, with working capital of approximately $23.1 million[74] - The company generated approximately $24.2 million in net proceeds from an at-the-market offering conducted between September 2020 and January 2021[63] - The company anticipates that available working capital is sufficient to fund operations for at least the next 12 months[75] Accounting and Controls - There have been no changes to critical accounting estimates from the Annual Report for the year ended December 31, 2021[76] - Management concluded that disclosure controls and procedures were effective as of March 31, 2022[76] - No changes to internal controls over financial reporting during the three-month period ended March 31, 2022[77]

Atomera Incorporated (NASDAQ:ATOM) Q4 2021 Earnings Conference Call February 15, 2022 5:00 PM ET Company Participants Mike Bishop - Investor Relations. Scott Bibaud - President and Chief Executive Officer Frank Laurencio - Chief Financial Officer Conference Call Participants Richard Shannon - Craig-Hallum Capital Mike Bishop Hello, everyone, and welcome to Atomera's Fourth Quarter Fiscal Year 2021 Update Call. I would like to remind everyone that this call and webinar are being recorded, and a replay will b ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Atomera licenses its proprietary MST® semiconductor technology to generate revenue through fees and royalties [Company Overview](index=6&type=section&id=Company%20Overview) The company licenses its MST performance-enhancing film via a multi-stage process, aiming for royalty revenue - Atomera's core business is developing and licensing its proprietary Mears Silicon Technology (MST), a thin film of reengineered silicon (100-300 angstroms thick) that enhances transistor performance, speed, reliability, and energy efficiency[17](index=17&type=chunk) - The company's business model is to license its technology to foundries, IDMs, and fabless manufacturers, rather than designing or manufacturing integrated circuits itself[18](index=18&type=chunk) - Revenue is generated through a multi-stage licensing process, starting with integration licenses, followed by manufacturing and distribution licenses that are expected to include larger fees and royalty payments[19](index=19&type=chunk)[20](index=20&type=chunk) - In January 2021, Atomera entered into a JDA with a leading semiconductor provider, which included an upfront, paid manufacturing license, with all development milestones achieved by February 2022[21](index=21&type=chunk) [Industry Overview](index=7&type=section&id=Industry%20Overview) The semiconductor industry's shift from Moore's Law creates opportunities for IP licensing companies like Atomera - The semiconductor industry faces challenges in maintaining the pace of Moore's Law, as shrinking transistor geometries below 100 nanometers has become increasingly difficult and expensive[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The industry has become vertically disaggregated, with specialized companies focusing on different stages of production, creating an opportunity for IP companies like Atomera to license broadly applicable technologies[32](index=32&type=chunk)[33](index=33&type=chunk) [MST Commercialization](index=11&type=section&id=MST%20Commercialization) The company follows a six-phase customer engagement model, with 15 customers in integration and one in installation - The customer engagement and adoption process for MST technology generally follows a six-phase model: 1 Engineering Planning, 2 Set-up for Integration, 3 MST Integration, 4 Process Installation, 5 Technology Qualification, and 6 Production[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - A manufacturing license is required for a customer to install MST technology in their own fab for R&D and qualification (Phase 4), while a separate distribution license is needed for commercial sales and royalty payments[52](index=52&type=chunk)[53](index=53&type=chunk) - As of the report date, Atomera had **15 customer engagements in Phase 3** (MST Integration) and **one engagement in Phase 4** (Process Installation)[55](index=55&type=chunk) [Competition](index=14&type=section&id=Competition) Atomera views its MST technology as an additive solution with no direct competition, facing only internal customer efforts - The company believes MST is a low-cost, additive technology that does not have significant direct competition, similar to other widely adopted industry advances like CMP and High-K/Metal-Gate[64](index=64&type=chunk) - Atomera is not aware of another technology on the market that provides the same technical benefits as MST but may face competition from internally-developed solutions at customer companies[64](index=64&type=chunk) [Intellectual Property Rights](index=14&type=section&id=Intellectual%20Property%20Rights) The company protects its technology with 118 U.S. and 95 foreign patents, with core patents expiring from August 2023 Patent Portfolio as of Dec 31, 2021 | Patent Jurisdiction | Count | | :--- | :--- | | U.S. Granted | 118 | | Foreign Granted | 95 | - The company's core patents related to MST cover materials, physical structures, and manufacturing processes, with the portfolio beginning to expire on **August 22, 2023**[69](index=69&type=chunk) - In 2021, the company was issued **34 new patents** worldwide, representing a **14% annual increase** in its portfolio[69](index=69&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from operating losses, an unproven royalty model, and lengthy customer qualification cycles - The company has a history of significant operating losses, with net losses of approximately **$15.7 million in 2021** and **$14.9 million in 2020**, and an accumulated deficit of **$165.9 million**[77](index=77&type=chunk) - There is no assurance that existing integration licenses or the JDA will advance to royalty-based distribution licenses[78](index=78&type=chunk) - The product qualification and licensing cycle is lengthy and costly, estimated to take **18 to 36 months** or longer from initial engagement to potential product incorporation[81](index=81&type=chunk) - A fire at the fab of licensee AKM has disrupted their business and interrupted the integration and testing of MST, casting doubt on the timing for a potential manufacturing license[80](index=80&type=chunk) - The long-term success of the business depends on a royalty-based model, which is inherently risky and subject to factors outside the company's control[86](index=86&type=chunk) [Unresolved Staff Comments](index=23&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - None[115](index=115&type=chunk) [Properties](index=24&type=section&id=Item%202.%20Properties) The company leases its principal executive offices in California and has smaller leased spaces in Massachusetts and Arizona - The company's executive offices are in Los Gatos, California, under a five-year lease expiring January 31, 2026[116](index=116&type=chunk) - Additional leased facilities include shared office space in Cambridge, Massachusetts, and a small office in Tempe, Arizona[116](index=116&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently subject to any pending legal proceedings - The company reports no pending legal proceedings[117](index=117&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Inapplicable[117](index=117&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under "ATOM", with 169 holders of record and no history of dividends - The company's common stock trades on the NASDAQ Capital Market under the symbol "ATOM"[118](index=118&type=chunk) - As of February 9, 2022, there were **169 holders of record** of the common stock[119](index=119&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the foreseeable future[120](index=120&type=chunk) [Reserved](index=25&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew significantly in 2021 due to a license fee, though operating expenses and net loss also increased [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Revenue rose to $400,000 in 2021, while higher operating expenses led to a slightly wider net loss of $15.7 million Key Financial Metrics | Financial Metric | 2021 (in thousands) | 2020 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $400 | $62 | +545% | | Total Operating Expenses | $15,929 | $14,969 | +6% | | Net Loss | ($15,714) | ($14,878) | +6% | - The increase in 2021 revenue was primarily due to a manufacturing license fee paid pursuant to the company's JDA[129](index=129&type=chunk) - Research and development expense increased by **4% to $8.8 million**, mainly due to higher payroll costs from headcount growth[131](index=131&type=chunk) - General and administrative expense increased by **10% to $6.2 million**, driven by higher insurance costs, stock-based compensation, and payroll expenses[132](index=132&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $28.7 million in cash, bolstered by recent equity offerings, ensuring sufficient near-term liquidity Liquidity Metrics | Metric (as of Dec 31, 2021) | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $28.7 | | Working capital | $26.3 | - The company raised approximately **$9.4 million** in net proceeds from an underwritten public offering in May 2020[136](index=136&type=chunk) - An at-the-market (ATM) offering conducted between September 2020 and January 2021 raised approximately **$24.2 million** in net proceeds[137](index=137&type=chunk) - Management believes that available working capital is sufficient to fund its forecasted requirements for at least the next 12 months from the filing date[138](index=138&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - Not applicable[145](index=145&type=chunk) [Financial Statements and Supplementary Data](index=30&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes audited financial statements, with the auditor highlighting lease accounting as a critical audit matter Balance Sheet Highlights | Balance Sheet (in thousands) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Assets | $36,060 | $39,395 | | Total Liabilities | $7,679 | $2,050 | | Total Stockholders' Equity | $28,381 | $37,345 | Statement of Operations Highlights | Statement of Operations (in thousands) | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | Revenue | $400 | $62 | | Loss from operations | ($15,529) | ($14,920) | | Net loss | ($15,714) | ($14,878) | | Net loss per share | ($0.70) | ($0.79) | - The independent auditor identified the application of lease accounting standard ASC 842 to a new equipment tool lease as a **critical audit matter** due to its material amount and significant management estimates[155](index=155&type=chunk)[156](index=156&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=50&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable - Not applicable[250](index=250&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2021[251](index=251&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2021[253](index=253&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter ended December 31, 2021[252](index=252&type=chunk) [Other Information](index=50&type=section&id=Item%209B.%20Other%20Information) This item is not applicable - Not applicable[255](index=255&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=50&type=section&id=Item%209C%3A%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable - Not applicable[255](index=255&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=51&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Required information is incorporated by reference from the company's forthcoming 2022 Proxy Statement - Information for this section is incorporated by reference from the forthcoming 2022 Proxy Statement[257](index=257&type=chunk)[258](index=258&type=chunk) [Executive Compensation](index=51&type=section&id=Item%2011.%20Executive%20Compensation) Required information is incorporated by reference from the company's forthcoming 2022 Proxy Statement - Information for this section is incorporated by reference from the forthcoming 2022 Proxy Statement[257](index=257&type=chunk)[259](index=259&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=51&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Required information is incorporated by reference from the company's forthcoming 2022 Proxy Statement - Information for this section is incorporated by reference from the forthcoming 2022 Proxy Statement[257](index=257&type=chunk)[259](index=259&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=51&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Required information is incorporated by reference from the company's forthcoming 2022 Proxy Statement - Information for this section is incorporated by reference from the forthcoming 2022 Proxy Statement[257](index=257&type=chunk)[260](index=260&type=chunk) [Principal Accountant Fees and Services](index=51&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Required information is incorporated by reference from the company's forthcoming 2022 Proxy Statement - Information for this section is incorporated by reference from the forthcoming 2022 Proxy Statement[257](index=257&type=chunk)[260](index=260&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=52&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the Form 10-K - This section provides a list of all financial statements, schedules, and exhibits filed as part of the Annual Report[262](index=262&type=chunk) [Form 10-K Summary](index=54&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary was provided - None provided[267](index=267&type=chunk)

111111 mer Investor Presentation November 2021 Atomera Incorporated 1 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," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward- looking statements. These forward-lo ...