Overview

Atomera Incorporated is a company that develops, commercializes, and licenses proprietary processes and technologies for the semiconductor industry, which is a $550+ billion market. Their lead technology, Mears Silicon Technology (MST), is a thin film of reengineered silicon that can be used to improve the performance of semiconductor devices.

Atomera does not manufacture integrated circuits directly, but rather licenses its technologies and processes to semiconductor companies, including foundries, integrated device manufacturers (IDMs), fabless semiconductor manufacturers, original equipment manufacturers (OEMs), and electronic design automation companies. Atomera’s commercialization strategy is to generate revenue through licensing arrangements, where customers pay a license fee and royalties for using MST technology in the manufacture of silicon wafers.

Atomera was originally founded in 2001 as Nanovis LLC and has since gone through several name changes, with the current name Atomera Incorporated adopted in 2016. In May 2022, the company entered into an Equity Distribution Agreement, which allows it to offer and sell up to $50 million in common stock through an “at-the-market” (ATM) offering.

Results of Operations

Revenues: To date, Atomera has only generated limited revenue from customer engagements for engineering services, integration license agreements, a manufacturing license granted under a joint development agreement (JDA), a license agreement with ST Microelectronics, and licensing of its MSTcad software. The company’s first commercial manufacturing and distribution agreement with ST Microelectronics, executed in April 2023, is expected to provide royalties on all MST-enabled products manufactured for commercial purposes.

Revenue for the three months ended March 31, 2025 and 2024 was approximately $4,000 and $18,000, respectively, consisting of MSTcad licensing and related consulting services revenue.

Cost of Revenue: Cost of revenue, which includes the costs of materials, direct compensation, and expenses incurred to provide deliverables that result in payment of success fees, delivery of wafers, and consulting services, was $0 and approximately $3,000 for the three months ended March 31, 2025 and 2024, respectively.

Operating Expenses: Atomera’s operating expenses, which consist of research and development, general and administrative, and selling and marketing expenses, totaled approximately $5.5 million and $5.0 million for the three months ended March 31, 2025 and 2024, respectively.

• Research and Development Expense: R&D expenses increased by approximately $397,000, or 14%, primarily due to increases in device fabrication costs, employee costs, and outside metrology expenses.
• General and Administrative Expense: G&A expenses increased by approximately $277,000, or 15%, primarily due to increases in legal costs and fees related to the company’s patent portfolio and corporate legal expenses.
• Selling and Marketing Expense: Selling and marketing expenses decreased by approximately $226,000, or 65%, primarily due to a reduction in headcount.

Other Income and Expenses: Atomera reported interest income of approximately $270,000 and $205,000 for the three months ended March 31, 2025 and 2024, respectively, reflecting interest earned on cash, cash equivalents, and short-term investments. Accretion income, related to the increase in value of available-for-sale securities, was approximately $6,000 and $46,000 for the same periods. Interest expense, related to a tool financing lease, was approximately $21,000 and $39,000, respectively.

Cash Flows from Operating, Investing and Financing Activities

• Operating Activities: Net cash used in operating activities was approximately $4.8 million and $4.1 million for the three months ended March 31, 2025 and 2024, respectively, primarily due to net losses and changes in working capital.
• Investing Activities: Net cash provided by investing activities was approximately $996,000 and $2.5 million for the three months ended March 31, 2025 and 2024, respectively, primarily due to the maturity of short-term available-for-sale investments.
• Financing Activities: Net cash provided by financing activities was approximately $2.1 million and $3.8 million for the three months ended March 31, 2025 and 2024, respectively, primarily related to net proceeds from sales under the company’s ATM offering, offset by principal payments on a financing lease.

Liquidity and Capital Resources

As of March 31, 2025, Atomera had cash and cash equivalents of approximately $24.1 million and working capital of approximately $21.7 million. The company believes its available working capital is sufficient to fund its forecasted working capital requirements for at least the next 12 months. However, Atomera’s future capital requirements will depend on its ability to successfully commercialize its MST technology, as well as competing technological and market developments. If the company is unable to generate sufficient revenue from license fees and royalties, it may need to raise additional capital through various financing sources, such as its ATM offering, follow-on equity offerings, debt financing, or joint ventures with industry partners.

Critical Accounting Estimates

There have been no changes to Atomera’s critical accounting estimates from those included in its Annual Report on Form 10-K for the year ended December 31, 2024.