Atomera(ATOM) - 2025 Q2 - Quarterly Report

PART I. Financial Information Item 1. Financial Statements This section presents Atomera Incorporated's unaudited condensed financial statements for the periods ended June 30, 2025, and December 31, 2024, along with detailed explanatory notes Condensed Balance Sheets The balance sheet shows a decrease in total assets and stockholders' equity from December 31, 2024, to June 30, 2025, primarily driven by a reduction in cash and cash equivalents and short-term investments. Total liabilities also decreased during this period Balance Sheet Metrics (in thousands) | Metric | June 30, 2025 (Unaudited) (in thousands) | December 31, 2024 (in thousands) | Change (2025 vs 2024) | | :-------------------------------- | :--------------------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $22,026 | $25,778 | -$3,752 | | Short-term investments | $0 | $995 | -$995 | | Total current assets | $22,748 | $27,092 | -$4,344 | | Total assets | $24,084 | $29,124 | -$5,040 | | Total current liabilities | $2,793 | $3,576 | -$783 | | Total liabilities | $2,793 | $4,047 | -$1,254 | | Total stockholders' equity | $21,291 | $25,077 | -$3,786 | Unaudited Condensed Statements of Operations The company reported a net loss for both the three and six months ended June 30, 2025, which increased compared to the same periods in 2024, primarily due to a significant decrease in revenue and an increase in operating expenses, particularly research and development Statements of Operations Metrics (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Revenue | $0 | $72 | -$72 | $4 | $90 | -$86 | | Cost of revenue | -$62 | -$74 | $12 | -$62 | -$107 | $45 | | Gross (loss) margin | -$62 | -$2 | -$60 | -$58 | -$17 | -$41 | | Total operating expenses | $5,193 | $4,628 | $565 | $10,660 | $9,647 | $1,013 | | Loss from operations | -$5,255 | -$4,630 | -$625 | -$10,718 | -$9,664 | -$1,054 | | Total other income (expense), net | $288 | $269 | $19 | $542 | $481 | $61 | | Net loss | -$4,967 | -$4,361 | -$606 | -$10,176 | -$9,183 | -$993 | | Net loss per common share, basic | -$0.17 | -$0.16 | -$0.01 | -$0.34 | -$0.35 | $0.01 | Unaudited Condensed Statements of Comprehensive Loss The company's comprehensive loss for the three and six months ended June 30, 2025, was primarily driven by the net loss, with a minor impact from unrealized gains/losses on available-for-sale securities Comprehensive Loss Metrics (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | -$4,967 | -$4,361 | -$10,176 | -$9,183 | | Unrealized gain (loss) on available-for-sale securities | $0 | -$6 | -$1 | -$7 | | Net loss (Comprehensive Loss) | -$4,967 | -$4,367 | -$10,177 | -$9,190 | Unaudited Condensed Statements of Stockholders' Equity Stockholders' equity decreased from $25.1 million at January 1, 2025, to $21.3 million at June 30, 2025, primarily due to the net loss incurred during the period, partially offset by proceeds from stock-based compensation, at-the-market stock sales, and stock option exercises Stockholders' Equity Summary (in thousands) | Metric (in thousands) | Balance January 1, 2025 | Balance June 30, 2025 | Balance January 1, 2024 | Balance June 30, 2024 | | :-------------------------------------- | :---------------------- | :-------------------- | :---------------------- | :-------------------- | | Total Stockholders' Equity | $25,077 | $21,291 | $18,170 | $17,479 | | Stock-based compensation (6 months) | N/A | $2,287 | N/A | $2,011 | | At-the-market sale of stock, net (6 months) | N/A | $3,199 | N/A | $6,392 | | Net loss (6 months) | N/A | -$10,176 | N/A | -$9,183 | Unaudited Condensed Statements of Cash Flows For the six months ended June 30, 2025, the company experienced a net decrease in cash and cash equivalents, primarily due to significant cash used in operating activities, partially offset by cash provided by investing and financing activities Cash Flow Summary (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net cash used in operating activities | -$8,287 | -$7,313 | -$974 | | Net cash provided by investing activities | $986 | $3,204 | -$2,218 | | Net cash provided by financing activities | $3,549 | $6,002 | -$2,453 | | Net increase/(decrease) in cash and cash equivalents | -$3,752 | $1,893 | -$5,645 | | Cash and cash equivalents at end of period | $22,026 | $14,484 | $7,542 | Notes to the Unaudited Condensed Financial Statements This section provides detailed explanations and disclosures for the unaudited condensed financial statements, covering business nature, liquidity, accounting policies, and equity Note 1. Nature of Operations Atomera Incorporated is an early-stage semiconductor company focused on developing and licensing proprietary processes and technologies, with limited revenue-generating activities to date - Atomera Incorporated (formerly MEARS Technologies, Inc.) is an early-stage company in the semiconductor industry, primarily focused on technology research, development, and commercial licensing of its proprietary processes and technologies[24][25] Note 2. Liquidity and Management Plans Atomera had $22.0 million in cash and $20.0 million in working capital as of June 30, 2025, but relies on ATM offerings to fund operations and believes current capital is sufficient for at least 12 months Liquidity Metrics (in thousands) | Metric | June 30, 2025 (in thousands) | | :------------------------ | :--------------------------- | | Cash and cash equivalents | $22,026 | | Working capital | $20,000 | - The company has generated only limited revenues since inception and has incurred recurring operating losses, indicating it is an early-stage business not yet generating positive cash flow[26] - Atomera entered into a new Equity Distribution Agreement (2025 ATM) on May 27, 2025, to offer and sell up to $50.0 million of common stock, replacing the expired 2022 ATM[27][28] ATM Offering Period Data | ATM Offering Period | Shares Sold (approx.) | Average Price per Share (approx.) | Net Proceeds (approx.) | | :------------------ | :-------------------- | :-------------------------------- | :--------------------- | | Q2 2025 (2025 ATM) | 185,000 | $5.21 | $792,000 | | H1 2025 (2022 & 2025 ATM) | 349,000 | $9.89 | $3,200,000 | - Management believes the company has sufficient capital to fund its current business plans and obligations for at least 12 months from the report's issuance date[30] Note 3. Summary of Significant Accounting Policies No material changes to significant accounting policies were reported from the prior annual report, detailing interim financial statements and recent accounting standard adoptions - No material changes to significant accounting policies were reported compared to the Annual Report on Form 10-K filed on March 4, 2025[31] - The company adopted ASU 2023-09 (Income Taxes) on January 1, 2025, which did not have a material impact on its financial position or results of operations, despite requiring additional disclosures[36] - The company does not believe ASU 2024-03 (Expense Disaggregation Disclosures) or ASU 2025-04 (Share-Based Consideration Payable to a Customer) will have a material impact on its financial position, results of operations, or financial statement disclosures[37][38] Note 4. Fair Value Measurements The company measures its cash equivalents and short-term investments at fair value on a recurring basis, classifying them as Level 1 assets within the fair value hierarchy - The company's cash equivalents and short-term investments are measured at fair value on a recurring basis and classified as Level 1 assets[41] Fair Value of Securities (in thousands) | Security Type (in thousands) | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :------------------------- | :----------------------- | :--------------------------- | | Cash | $381 | $1 | | Money market funds | $21,645 | $25,777 | | US agency bonds | $0 | $995 | | Total | $22,026 | $26,773 | Note 5. Revenue Atomera recognizes revenue primarily from integration service agreements, manufacturing licenses, and MSTcad licenses, with revenue for the three and six months ended June 30, 2025, significantly lower than the prior year - Revenue is recognized when performance obligations are satisfied, either at a point in time (integration service agreements, manufacturing licenses) or over time (MSTcad licenses)[44] Revenue Breakdown (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenue | $0 | $72 | $4 | $90 | | North America Revenue | $0 | $72 | $4 | $90 | | Asia Pacific Revenue | $0 | $0 | $0 | $0 | | Revenue from products/services transferred at a point in time | $0 | $50 | $0 | $50 | | Revenue from products/services transferred over time | $0 | $22 | $4 | $40 | - As of June 30, 2025, the company did not have any deferred revenue to recognize in the future[47] Note 6. Basic and Diluted Loss Per Share Due to recurring net losses, Atomera's basic and diluted net loss per share are equal, as all potentially dilutive securities are anti-dilutive - Basic and diluted net loss per share are equal because the company has incurred net losses, making all potentially dilutive securities anti-dilutive[48] Potential Common Stock Equivalents (in thousands) | Potential Common Stock Equivalents (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Stock Options | 3,323 | 3,613 | | Unvested restricted stock units | 635 | 0 | | Unvested restricted stock awards | 318 | 567 | | Total | 4,276 | 4,180 | Note 7. Leases The company accounts for leases over one year under ASC 842, with lease payments for a key tool adjusted annually based on usage, and a new short-term lease entered in December 2024 - Lease payments for a key tool used in technology development are subject to annual adjustments based on tool availability and usage[51] - A new 12-month lease agreement for a tool in Tempe, Arizona, was entered into in December 2024, with payments of $95,000 per month, not included in long-term lease obligations due to its short term[52] Lease Costs and Future Payments (in thousands) | Lease Costs (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total financing lease costs | $268 | $316 | $540 | $636 | | Total operating lease costs | $353 | $326 | $704 | $653 | | Future Minimum Lease Payments (in thousands) | Financing leases | Operating leases | | :--------------------------------------- | :--------------- | :--------------- | | Remaining 2025 | $697 | $104 | | 2026 | $479 | $23 | | Total lease liability | $1,148 | $124 | Note 8. Stock Based Compensation The company's stock incentive plans provide for equity awards, with an additional 1.75 million shares approved for the 2023 Plan, and approximately $8.7 million of unrecognized expense remaining - Shareholders approved an amendment to the 2023 Stock Incentive Plan in May 2025, adding an additional 1,750,000 shares, bringing the total available shares under both plans to approximately 2.5 million as of June 30, 2025[55] Stock-Based Compensation Expense and Activity (in thousands) | Stock-Based Compensation Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $536 | $398 | $995 | $775 | | General and administrative | $740 | $525 | $1,339 | $1,108 | | Selling and marketing | $2 | $64 | -$47 | $128 | | Total | $1,278 | $987 | $2,287 | $2,011 | - As of June 30, 2025, there was approximately $8.7 million of total unrecognized compensation expense related to unvested share-based compensation arrangements, expected to be recognized over a weighted-average period of 2.2 years[56] Stock Option Activity (in thousands, except prices) | Stock Option Activity (in thousands, except prices) | Outstanding at Jan 1, 2025 | Granted | Exercised | Forfeited | Expired | Outstanding at June 30, 2025 | | :------------------------------------------------ | :------------------------- | :------ | :-------- | :-------- | :------ | :--------------------------- | | Number of Shares | 3,793 | 2 | (173) | (167) | (132) | 3,323 | | Weighted Average Exercise Price per Share | $6.64 | $5.78 | $5.23 | $3.50 | $5.99 | $6.90 | Restricted Stock Award Activity (in thousands, except prices) | Restricted Stock Award Activity (in thousands, except prices) | Outstanding at Jan 1, 2025 | Vested | Outstanding non-vested at June 30, 2025 | | :-------------------------------------------------------- | :------------------------- | :----- | :-------------------------------------- | | Number of Shares | 469 | (151) | 318 | | Weighted Average Grant Date Fair Value per Share | $7.17 | $7.01 | $7.24 | Restricted Stock Unit Activity (in thousands, except prices) | Restricted Stock Unit Activity (in thousands, except prices) | Outstanding at Jan 1, 2025 | Granted | Vested | Forfeited | Outstanding at June 30, 2025 | | :------------------------------------------------------- | :------------------------- | :------ | :----- | :-------- | :--------------------------- | | Total Restricted Stock Units | 0 | 722 | (27) | (60) | 635 | | Weighted Average Grant Date Fair Value per Share | $0 | $7.75 | $6.33 | $8.21 | $7.76 | Note 9. Commitments and Contingencies As of June 30, 2025, Atomera Incorporated was not party to any material litigation, claims, or assessments - The company is not involved in any material litigation, claims, or assessments as of June 30, 2025[61] Note 10. Equity On April 28, 2024, the company sold 2,247 shares of common stock to its CEO for approximately $10,000 - On April 28, 2024, the company sold 2,247 shares of common stock to its CEO, Scott Bibaud, at $4.45 per share, totaling approximately $10,000[62] Note 11. Segment Information Atomera operates as a single operating segment, with its chief operating decision makers assessing financial performance and allocating resources based on total operating expense, operating margin, and cash consumption - The company operates as a single operating segment[63] - The chief operating decision makers (CEO and CFO) use total operating expense, operating margin, and cash consumption to assess financial performance and allocate resources[63] Segment Financial Information (in thousands) | Selected Financial Information (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $0 | $72 | $4 | $90 | | Operating margin | -$5,255 | -$4,630 | -$10,718 | -$9,664 | | Net loss | -$4,967 | -$4,361 | -$10,176 | -$9,183 | Note 12. Subsequent Events Subsequent to June 30, 2025, the company issued approximately 393,000 additional shares through its ATM offering, generating about $2.0 million in net proceeds - After June 30, 2025, the company issued approximately 393,000 additional shares via its ATM offering, yielding about $2.0 million in net proceeds[65] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Atomera's financial condition and operational results, highlighting its early-stage nature and reliance on capital raises Overview Atomera develops and licenses Mears Silicon Technology (MST) to improve transistor performance, with revenue generated through license fees, royalties, and MSTcad software - Atomera develops and licenses Mears Silicon Technology (MST), a proprietary thin-film silicon re-engineering technology (100-300 angstroms thick) designed to enhance transistor speed, reliability, and power efficiency[67] - The company's commercialization strategy involves licensing MST technology and MSTcad software to foundries, integrated device manufacturers (IDMs), fabless semiconductor manufacturers, original equipment manufacturers (OEMs), and electronic design automation companies[68][69] - Revenue is generated through license fees for MST technology use, royalties per silicon wafer/device incorporating MST, and MSTcad software licenses[69] - The company has generated limited revenue from licensing agreements (ST Microelectronics, Asahi Kasei Microdevices, one fabless manufacturer, one foundry), a joint development agreement, engineering services, and MSTcad licensing[69] Results of Operations This section details financial performance, showing a decline in revenue, increased operating expenses, and a higher net loss for the periods ended June 30, 2025 Revenues Revenue for the three and six months ended June 30, 2025, was significantly lower than the prior year, consisting primarily of MSTcad licensing and related consulting services - Revenue for the three months ended June 30, 2025, was $0, down from $72,000 in 2024[75] - Revenue for the six months ended June 30, 2025, was $4,000, down from $90,000 in 2024[75] - Current revenue primarily consists of MSTcad licensing and related consulting services[75] - The license agreement with ST Microelectronics (April 2023) is the first commercial manufacturing and distribution agreement, expected to generate royalties upon successful completion of contractual milestones[74] Cost of revenue Cost of revenue for the three and six months ended June 30, 2025, decreased compared to the same periods in 2024, reflecting variability based on the mix of license and engineering services revenues Cost of Revenue by Period (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Cost of revenue | $62 | $74 | -$12 | $62 | $107 | -$45 | Operating expenses Total operating expenses increased for both the three and six months ended June 30, 2025, compared to the prior year, driven by increases in research and development and general and administrative expenses Operating Expenses by Period (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Total operating expenses | $5,193 | $4,628 | $565 | $10,660 | $9,647 | $1,013 | Research and development expense Research and development expenses increased by 16% for the three months and 15% for the six months ended June 30, 2025, primarily due to higher device fabrication costs, employee costs, and stock-based compensation Research and Development Expenses (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | R&D expenses | $3,004 | $2,589 | $415 (16%) | $6,259 | $5,447 | $812 (15%) | - Increases were primarily driven by device fabrication costs (+$136k for 3 months, +$317k for 6 months), employee costs (+$125k for 3 months, +$216k for 6 months), and stock-based compensation expenses (+$137k for 3 months, +$219k for 6 months)[79][80] General and administrative expense General and administrative expenses increased by 12% for the three months and 14% for the six months ended June 30, 2025, mainly due to higher stock-based compensation, corporate legal fees, and intellectual property expenses General and Administrative Expenses (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | G&A expenses | $2,048 | $1,832 | $216 (12%) | $4,136 | $3,643 | $493 (14%) | - Increases were primarily due to stock-based compensation expenses (+$215k for 3 months, +$231k for 6 months), corporate legal fees (+$97k for 6 months), and intellectual property-related expenses (+$80k for 6 months)[81][82] Selling and marketing expense Selling and marketing expenses decreased significantly by 32% for the three months and 52% for the six months ended June 30, 2025, primarily due to a reduction in headcount Selling and Marketing Expenses (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | S&M expenses | $141 | $207 | -$66 (32%) | $265 | $557 | -$292 (52%) | - The decrease in selling and marketing expenses was primarily due to a reduction in headcount[83][84] Interest income Interest income increased for both the three and six months ended June 30, 2025, reflecting interest earned on cash, cash equivalents, and short-term investments Interest Income by Period (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Interest income | $234 | $185 | $49 | $504 | $390 | $114 | Accretion income Accretion income significantly decreased for the three and six months ended June 30, 2025, compared to 2024, as cash and cash equivalents are now held as cash and mutual funds Accretion Income by Period (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Accretion income | $0 | $47 | -$47 | $6 | $93 | -$87 | - The decrease in accretion income is due to the company's cash and cash equivalents being held as cash and mutual funds as of June 30, 2025, rather than available-for-sale securities[86] Interest expense Interest expense decreased for both the three and six months ended June 30, 2025, compared to 2024, primarily related to the tool financing lease Interest Expense by Period (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Interest expense | $18 | $35 | -$17 | $39 | $74 | -$35 | Other income (expense), net Other income, net, remained relatively stable for both the three and six months ended June 30, 2025 and 2024, primarily consisting of a refundable state research and development tax credit Other Income (Expense), Net (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Other income, net | $72 | $72 | $71 | $72 | - These amounts primarily consist of a refundable state research and development tax credit, net of filing costs and tax consulting services[88] Cash Flows from Operating, Investing and Financing Activities For the six months ended June 30, 2025, net cash used in operating activities increased, while net cash provided by investing and financing activities decreased, resulting in a net decrease in cash and cash equivalents Cash Flow Activities Summary (in thousands) | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net cash used in operating activities | -$8,287 | -$7,313 | -$974 | | Net cash provided by investing activities | $986 | $3,204 | -$2,218 | | Net cash provided by financing activities | $3,549 | $6,002 | -$2,453 | - Net cash used in operating activities for H1 2025 was primarily due to a net loss of $10.2 million and a decrease in accrued payroll expenses, partially offset by $2.3 million in stock-based compensation[89] - Net cash provided by investing activities for H1 2025 mainly resulted from the maturity of short-term available-for-sale investments[90] - Net cash provided by financing activities for H1 2025 was primarily from ATM stock sales and stock option exercises, offset by financing lease payments[92] Liquidity and Capital Resources Atomera had $22.0 million in cash and $20.0 million in working capital, but incurred a $10.2 million net loss and used $8.3 million in cash from operations, relying on ATM offerings for capital Liquidity and Capital Resources Summary (in thousands) | Metric | June 30, 2025 (in thousands) | | :------------------------ | :--------------------------- | | Cash and cash equivalents | $22,026 | | Working capital | $20,000 | - For the six months ended June 30, 2025, the company reported a net loss of $10.2 million and used $8.3 million in cash from operations[93] - The company continues to utilize "at-the-market" (ATM) offerings to raise capital, with $792,000 net proceeds from the 2025 ATM in Q2 2025 and $3.2 million from both 2022 and 2025 ATMs in H1 2025[94][95] - Management believes current working capital is sufficient for at least 12 months, but future capital requirements depend on successful commercialization and market developments, necessitating additional capital if revenue from license fees and royalties is insufficient[96] Critical Accounting Estimates No changes to critical accounting estimates were reported from the Annual Report on Form 10-K for the year ended December 31, 2024 - No changes to critical accounting estimates were reported from the Annual Report on Form 10-K for the year ended December 31, 2024[97] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is marked as "Not applicable" for Atomera Incorporated in this quarterly report - This section is marked as "Not applicable"[98] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to a previously identified material weakness in internal controls over the review and approval of journal entries. Remediation efforts are underway, with enhanced controls being implemented and tested Evaluation of Disclosure Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness[99] Changes in Internal Control over Financial Reporting A material weakness in internal controls over the review and approval of journal entries was identified, with remediation efforts underway in 2025 - A material weakness was identified in internal controls over the review and approval of journal entries into the general ledger[100] - The company began implementing and testing enhanced controls in 2025 to address the identified material weakness[100] - No other material changes to internal controls over financial reporting occurred during the three months ended June 30, 2025[100] PART II. Other Information Item 1A. Risk Factors No material changes to the primary risk factors were reported from the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the primary risk factors were reported from the Annual Report on Form 10-K for the year ended December 31, 2024[101] Item 5. Other Information No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended June 30, 2025 - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended June 30, 2025[102] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q report, including certifications (Sarbanes-Oxley Act Sections 302 and 906) and Inline XBRL documents - The report includes certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[103] - Inline XBRL Instance Document and Taxonomy Extension Documents are filed electronically[103] Signatures The report was duly signed on behalf of Atomera Incorporated by its Chief Executive Officer and Chief Financial Officer on August 5, 2025 - The report was signed by Scott A. Bibaud (CEO) and Francis B. Laurencio (CFO) on August 5, 2025[107]