Atomera Incorporated Aktie

Hello, everyone, and welcome to Atomera's First Quarter 2026 Update Call. I'd like to remind everyone that this call and webinar are being recorded, and a replay will be available on Atomera's IR website for 1 year. I'm Mike Bishop with the company's Investor Relations.

As in prior quarters, we are using Zoom, and we will follow a similar format. [Operator Instructions] We will open with prepared remarks from Scott Bibaud, Atomera's President and CEO; and Frank Laurencio, Atomera's CFO. Then we will open the call to questions. If you are joining by telephone, you may follow a slide presentation to accompany our remarks on the Events and Presentations section of our Investor Relations page on our website.

Before we begin, I would like to remind everyone that during today's call, we will make forward-looking statements. These forward-looking statements, whether in prepared remarks or during the Q&A session, are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 10-K filed with the SEC on February 24, 2026. Except as otherwise required by federal securities laws, Atomera disclaims any obligation to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions and circumstances.

Also, please note that during this call, we will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is posted on our website.

Now with that, I'd like to turn the call over to our President and CEO, Scott Bibaud. Go ahead, Scott.

Thanks, Mike, and good afternoon, everyone. This quarter, we made solid progress with multiple customers across our highest value markets while also expanding the breadth of applications where MST can solve real current pain points for the semiconductor industry. We're seeing strong customer pull in advanced logic, memory and wide band gap materials like GaN and power and in RF, areas that are being shaped by the rapid growth of AI infrastructure, which is driving the need for better power efficiency, signal integrity and system performance.

Today, I'll start with an update on gate-all-around, where we've been working closely with customers and our strategic partners to validate MST in these advanced geometries. Then I'll touch on our customer pipeline and close with updates on GaN, giving insights on some exciting new technical results that are shaping near-term opportunities.

As we said before, the move to gate-all-around at 2 nanometers and beyond is one of the most important architectural transitions in the industry, and it's also one of the most difficult manufacturing environments since fabs must build incredibly complicated structures at line widths of 5,000x smaller than a human hair, where a small amount of atomic migration can cause big problems.

Gate-all-around transistors are the building blocks for AI infrastructure and dopant diffusion control is critical to their effectiveness in terms of performance and reliability. Therefore, the industry is demanding clear proof that any new material can be deposited precisely and that it delivers measurable benefits in advanced silicon devices.

Today, there are 4 companies in the world developing gate-all-around transistors, TSMC, Samsung, Intel and Rapidus. We know that each of them can use the capabilities of MST, so it's our goal to achieve adoption at all 4. Further, as these companies transition to the generation beyond gate-all-around called CFET, our technology becomes even more essential. So working with us now is in their best interest long term.

In our last earnings call, we have just received measured silicon results that prove MST is the best solution for a critical source strain liner application in these small geometry transistors. At this point, we're actively working on evaluations of our technology with 2 of our target gate-all-around customers and discussions are underway with the others.

It is typical that a customer asked to conduct multiple demonstrations before agreeing to accept a new technology for implementation in their fab wafer flow. These demonstrations help to validate our claims while simultaneously addressing the detailed implementation and functionality questions these customers are focused on solving.

We also expanded the scope of our work with our strategic development partner this quarter, which is important because it strengthens both our technical velocity and our credibility with the ecosystem. Their test and development infrastructure helps us generate the kind of data that advanced node customers insist on seeing before engaging and their endorsement will certainly help us engage a broader set of teams within each target account.

Each of the large memory manufacturers are facing similar challenges to the gate-all-around customers as they develop their next-generation transistors in DRAMs and high-bandwidth memories. Our team is in discussions with them right now, and we are currently working on multiple solutions using MST to assist in this area. Right now, memory manufacturers would do almost anything to get greater fab capacity, and they have the resources to evaluate different methods of doing so. We hope to take advantage of that opportunity with solutions enabled by MST.

The momentum we're seeing in the advanced node transistor space is a result of many years of work targeting current market trends. The macro challenges that AI success has put front and center, capacity and performance of CPUs, GPUs, logic and memory, the power demands of cloud providers and the increased costs associated with these are all areas that Atomera can help solve. For that reason, we believe that MST is a fundamental tool for the future of AI.

Our customer pipeline remains very active across multiple domains. For example, our work with our large IDM customer continues to go well, and we expect additional results from wafer runs soon. Our efforts with ST Microelectronics are bearing fruit, and we are confident we will reengage with them again in the near future, consistent with our view that MST can create value across multiple product lines, especially in a large diversified IDM or foundry.

In RF SOI, we are seeing strong results confirming our extensive TCAD simulations. The technical results we've been focused on, including for both power switch and LNA have been confirmed through customer silicon runs. The near-term question is less about performance and more about the most efficient path to commercialization, particularly in cases involving fabless licensees where aligning the business structure with the manufacturing flow can be complex.

In power devices, we're seeing excellent potential in new development work being done to target MST at both TrenchFET and HVT transistors, useful in high-frequency, high-speed and high-voltage applications. At the same time, wafers continue moving forward with our second JDA partner, and we'll keep pushing those efforts toward production pathway.

Turning to GaN. We made meaningful advancements this quarter, including a breakthrough that could give us a technical leadership in RF GaN on silicon to augment the advantages previously outlined for power GaN on silicon. To explain the innovation, I need to give a little background.

GaN on silicon is a much more economical growth method than alternatives built on exotic substrates like silicon carbide or sapphire. But when GaN on silicon is manufactured due to the GaN stack growth process, gallium and aluminum ions gather at the silicon substrate interface, forming an unwanted sheet charge layer called a parasitic channel, which is well known to limit RF performance and GaN on silicon applications. In fact, its elimination has been the subject of materials and growth studies for more than 20 years.

In the past few weeks, we received preliminary performance data suggesting MST can dramatically reduce the parasitic channel. It does this by using MST's fundamental interface engineering to block the gallium and aluminum ions from getting into the silicon substrate. An industry veteran told us that in his 20 years, this is the best measured sheet charge data he has ever seen. We're continuing to validate this very promising discovery with our test and measurement partners.

RF GaN on silicon is a value in the wireless infrastructure, military, defense and satellite markets. It's also being actively evaluated for high integrated RF front ends such as those for 6G cellular. So the market potential is large and growing fast. We are actively engaging on both 200-millimeter and 300-millimeter wafer sizes in GaN depending on our customers' requests. That matters because the wafer size for GaN on silicon is one of its key advantages leading directly to a customer's path to high-volume production, low-cost structure and a set of fabs that can support ramp, including opening doors for new applications with conventional silicon fabrication methods and devices.

We're seeing expanded interest in partnerships across the ecosystem, including engagements involving Incize, Synopsys, Texas State University, Sandia and others. Those kinds of parallel tasks, commercial customers plus research and ecosystem partners can compress development cycles and accelerate the time from promising materials data to something customers can qualify and deploy. Work here is aimed at generating data that is both technically rigorous and directly translatable to customer device requirements.

Finally, a quick note on our announcement last week about expanding our collaboration with Synopsys. We've worked with Synopsys for years to enable accurate modeling of MST inside the Sentaurus TCAD environment through our MST CAD tool set. This expanded collaboration extends that relationship into GaN workflows for both high-value RF and power devices.

Practically, this means we're working closely with Synopsys to provide feedback on their GaN models, and we'll be jointly developing marketing materials so customers and partners can evaluate the physical and electrical effects of MST and GaN more quickly and with higher confidence.

To summarize, we're making progress where it matters, expanding and deepening gate-all-around engagements, broadening GaN from power into RF with concrete technical innovations and continuing to advance multiple customer programs across our pipeline. We remain focused on converting technical validation into commercial structures that can drive repeatable revenue and are confident in our ability to do so. This is indeed an exciting time for Atomera.

With that, I'll turn the call over to Frank, our CFO, to review our financials.

Thank you, Scott. At the close of the market today, we issued a press release announcing our results for the first quarter of 2026, and this slide shows our summary financials.

Our GAAP net loss for the first quarter of 2026 was $6.1 million or $0.17 per share compared to a net loss of $5.2 million, which was also $0.17 a share in Q1 of 2025. On a non-GAAP basis, net loss last quarter was $4.9 million or $0.14 a share. And our Q1 2025 net loss was $4.4 million or $0.15 a share.

GAAP operating expenses were $6.2 million in Q1 of 2026, which was an increase of $742,000 from $5.5 million of GAAP operating expense in Q1 2025. Stock compensation expense, which is excluded from non-GAAP results, increased by $397,000, primarily due to new hires and our adoption in Q1 of 2025 of performance stock units, or PSUs, for executives.

PSUs vest over 3 years, whereas the time-based options and RSUs that we had previously granted to executives vested over 4 years. Although the vesting period is shorter, PSUs vest only if our stock performs well relative to the Russell 2000. The first tranche of PSUs issued in Q1 2025 lapsed without vesting because we did not hit the required stock price performance threshold.

With the exception of stock compensation expense, the drivers of GAAP and non-GAAP expenses are substantially the same. So I will drill down into other factors that impacted our expenses by focusing on non-GAAP numbers. Please refer to the slide presentation for a reconciliation between GAAP and non-GAAP results.

Non-GAAP operating expenses in the first quarter were $4.8 million, a year-over-year increase of $348,000 from $4.4 million in Q1 2025. Sales and marketing expense increased by $203,000, reflecting our 2 executive hires since October. R&D expenses increased by $127,000 from $2.8 million in Q1 of last year to $2.9 million in the first quarter of this year, primarily due to higher spending on outsourced engineering to support the wafer runs for our gate-all-around engagements, our IDM customer and our JDA customer, which drives spending on metrology. G&A expenses were basically flat from the first quarter of last year.

Turning to sequential quarterly results. First quarter 2026 non-GAAP net loss was $4.9 million or $0.14 a share compared to net loss of $3.3 million or $0.10 a share in Q4 of 2025. Operating expenses were $4.8 million in Q1, which is a $1.6 million increase from $3.2 million in Q4.

Let me offer some color on the magnitude of the sequential increase. As I explained on our last quarterly call, our Compensation Committee elected not to pay the full 2025 executive bonus, withholding approximately $669,000, which normally would have been paid out in January. The committee provided the executive team the opportunity to earn back the withheld amount in 2026 upon achievement of commercial objectives. This led to us reversing accrued bonus expense in the fourth quarter, which skews the comparison of expenses between Q1 and Q4.

Our balance of cash, cash equivalents and short-term investments on March 31, 2026, was $41.1 million compared to $19.2 million on December 31, 2025. We used $4.6 million of cash in operating activities during Q1 compared to $3.2 million in Q4 and $4.8 million in Q1 of last year. As is typical for us, cash used in the first quarter of every year is higher than other quarters due to payments for items that are expensed over the year.

In February of this year, we closed on a $25 million registered direct stock offering, selling 5 million shares of common stock at $5 per share, netting us proceeds of $23.6 million after fees and expenses. Prior to this offering, we had also raised $3.2 million in Q1 by selling approximately 1.3 million shares under our ATM at an average price of $2.47. Currently, we have 38.7 million shares outstanding.

With the proceeds of our equity offering, we feel that our current cash balance puts us in a strong position to execute on the opportunities ahead of us, but we will continue to be disciplined about controlling our costs. On our last call, I said that we expected our 2026 annual non-GAAP operating expense to be approximately $18.5 million, and we are holding to that number. To reiterate, the reason why the expense increase appears as large as it does over $15.9 million of OpEx in 2025 is the bonus deferral, which essentially shifted expenses out of Q4 and moved them into 2026. Organic increases in spending mainly relate to the hiring of our VP of Sales in Q4 last year and our VP of Marketing in Q1.

Revenue in Q1 was $11,000 and consisted of fees for wafer deliveries to the large IDM that Scott talked about. And we have $96,000 of deferred revenue on our balance sheet. Approximately $46,000 of revenue that we expected to recognize in Q1 pushed out to Q2 because wafer shipments that we anticipating making last quarter pushed out to early this quarter. Accordingly, we expect Q2 revenue to be in the range of $50,000 to $100,000.

With that, I will turn the call back over to Scott for a few summary remarks before we open the call up to questions. Scott?

Thanks, Frank. And before we take questions, I want to thank our employees, our customers and our shareholders for their continued support. We're excited about the progress we're making, and we remain focused on translating our growing body of simulation and customer silicon evidence into commercial agreements that can drive long-term repeatable revenue and a strong sustainable business.

Mike, we will now take questions.

[Operator Instructions] And right now, it looks like Richard is ready to ask a first question. Richard, please go ahead.

Scott, the gate-all-around stuff here, you made some very interesting comments. I want to touch on a few of these things here. So you mentioned that you've got -- now have measured silicon results here and your customers have said that they're better than the other solutions that they have here. Just want to make sure that that's what you said, and then I have a couple of follow-ups on that topic.

Yes, you maybe -- are you talking about GaN or gate-all-around?

Gate-all-around.

On gate-all-around, we do have measured silicon results. And we evaluated our results against another method that people in the industry are using to accomplish the same type of thing we're doing, and our results are a significant improvement. So yes, we have definitely had that, and we're showing that to customers.

So to follow up on this, so I assume that the measured results are wafers run at 1 of these 4 targeted customers. Is that correct? Or it's independent?

In fact the measured results are something that we did in conjunction with our strategic partner, where they had gate-all-around structures, and we use those devices to grow MST on those gate-all-around structures in the wafer, and then we're able to conduct this testing. So now that's -- if you think about how we approach customers, we go out and we show customers our simulation data, which we can do without a strategic partner. But then having silicon tested data is a massive improvement over that. So that's been able to really open the doors for us to get into the customers. The next step from there is the customer will typically say, okay, we can see you did that on your strategic partners' structure. Now we want you to do it on our structure because our structure is different. Everybody is different.

And when I mentioned that we're -- we have work underway with 2 of the target customers there doing demonstrations, that's the step we're at where we're trying to do -- implement our technology on their structures and show them that. We believe that the step after that, Richard, will be that they'll have to install MST in their fabs to do any further testing because these structures are so small and hard to manufacture that it's difficult to do a lot more work by having us run demonstrations in our fab.

Okay. So to that point, do you have a commitment to attempt to do this on your customer structures? Or is just the discussions to get that agreed to?

We're working on it with 2 of them actually -- I don't know what you mean by commitment, but I guess they're sending us wafers and we're putting on. So yes, that's pretty committed.

Okay. That sounds pretty good. So what's the time frame for this work to get done? And then I assume, given what I've heard for the many years that I followed you guys that the analysis of these can often take a while, and these are more complex than most. So I would assume that analysis takes a while. So what's the kind of the turnaround time between getting that done, analyzing and getting to that next step? What do you foresee that taking?

It's going to take several months. Just us doing the work, we have to really do a lot of development work to just figure out how to grow things effectively in these tiny devices that they're sending us. And so normally, when someone sends us wafers within 3 weeks to a month, we can turn those around and send them back. In this case, my guess is it might take us longer than that, 2 to 3 months. And then when we sit in the back, they have to put them in their fab and run them for several months. So it could be in the order of 6 months before we start to see results coming out of this.

Now in -- I mentioned a few times on the call and both structural analysis, which is where they are looking at what we did for deposition in those structures and making sure that what we did was appropriate, they can do that pretty quickly because you're taking TEM images like electron microscope images and looking at what we did, that -- those results will come quickly, but the electrical results will be the result of running the wafers through the whole line.

Got it. Okay. And so you're expecting or expecting to run wafers with -- wafers from 2 different GAA customers then over the next few months?

Yes.

Okay. Going back to my first question here and understanding the results you measured with the runs you did with your equipment partner. I want to get a sense of whether the customers agree that the comparisons you've done with, I think, an industry standard approach to dopant diffusion, they actually agree with that as well that, that is much better than what they've been -- what they can get internally? Or is this just what your equipment partners concluded for you?

I think there's no doubt that the customers that we've been able to engage with and get down to lots of details on it, they have been impressed enough that they want to move forward with these further demonstrations. So yes, they definitely saw the benefit of using MST to conduct -- to block the dopant diffusion in the areas that we're talking about and how it works better than what they're currently implementing.

Okay. Okay. Fair enough. Some really interesting stuff going on there. Maybe a couple of other quick questions. So on the DRAM side, it sounds like we made some progress here. But if I'm to compare that with the progress on the logic side to the memory side, it sounds like the logic is reasonably farther ahead than memory. Is that a fair comparison?

Yes, that's true. We are talking with the memory manufacturers, and they -- one thing, memory is quite a different architecture than logic that we're using gate-all-around. But in memory, they're having the same type of dopant diffusion problems with their newer architectures as the gate-all-around folks are and our technology is directly applicable to that. So we have a lot of interest in -- from the DRAM guys about that. We're also talking to them about some other solutions that may be able to help them in different ways. So it's lots of different vectors of how we're engaged with DRAM guys. I should say with the memory guys because it's also in high bandwidth memory, not just DRAM. But we're further ahead with the gate-all-around customers than we are with them.

Okay. All right. Fair enough. Maybe a question on the GaN side here. So I think before -- my recollection is you're talking more about applications of GaN into the power space, but more recently, it's been in RF here. How would you characterize kind of the -- which one is kind of the leader in terms of getting to the next step here and getting installation licenses, I know that's not the right term, but it's kind of what I think of it, installation licenses or using the wafers with that already built in there, which one is kind of in the lead here if either one is notably better?

Okay. So it's kind of interesting where you're right saying that we initially targeted the power market for our GaN on silicon work. The power market is actually much larger than the GaN on RF market today. And that's one of the reasons why we targeted it first. And for the power market, we -- our big value that we've been talking about is to improve crystal quality and therefore, to allow people to manufacture on larger wafers because there'd be less ball and warp as they're growing the GaN and fewer defects and therefore, would have a lot of inherent value.

Now the only challenge with that is to validate all that work, you actually have to build wafers and build electrical devices and do a lot of testing. So that takes some time. And everybody's GaN growth properties are different. So there's some tuning that has to happen -- and so that takes time.

The new things I just mentioned, GaN on RF, we got some test data and we just spoke about it at a big compound semiconductor conference last week, and there is a huge amount of interest in the industry. And just looking at this early data that we got, it has to be validated and so forth. But just looking at that data could be enough for someone to adopt us because it's such a big breakthrough in such an area where the industry needs solutions. In RF, they don't actually have to do the full electrical testing before they can decide to move forward on something. So it could be that we're moving -- although we're earlier into the GaN on silicon for RF market, that one could move faster.

Okay. All right. Fair enough. One last question for me. And maybe going back to STMicro here, and I'm not sure if this is the -- who you're now referring to the IDM customer or not here. So maybe correct me if I'm misassuming that here. But maybe just kind of indicate where we're sitting here with those guys. Obviously, we have put a pause on the power stuff that you're hoping to move forward with that you talked about late last year. How about the other applications with them? Are they still moving as full force as you had expected and had been seeing since the cessation of the power work with them?

Yes. Just to clarify, when I talk about the IDM, it's not STMicro. STMicro is another IDM, and we think we have a lot of different areas that we can engage with STMicro, but that's a separate engagement. So yes, we've been talking with multiple business units over there and been doing some work, some evaluation work, and we have recently got some results that lead us to believe that we're going to start reengaging with them on developing a product. We aren't at the point where we can talk about that yet, and ST hasn't specifically given us any okay to talk about it. But yes, we've been saying since we had to give that unfortunate news about the BCD program at ST that we are working with other groups and that our relationship with the company was great. And the thing is they really know and understand MST technology and have seen it and they believe in it. So this is kind of an indication of those comments that we've been making and I haven't been able to announce a new deal with them yet, but we hope to be able to do that in the future.

Okay. There are a few questions that have been asked in the Q&A line, and I'll just bring them up one by one.

So the first kind of question is about gate-all-around and it's that given the evaluation periods that we've seen in other areas of Atomera, are there specific milestones that need to be hit to convert these gate-all-around customers into JDA? And what's a realistic time frame for such a conversion?

Yes. At a high level, I'll -- maybe I'll put a little bit more structure on what I showed -- I talked about Richard before. It's typical customers who want to see kind of 4 different levels. They want to see TCAD results that show that you have the potential to deliver performance, and they have to understand all the TCAD background and believe in it. Then they'll move ahead and say, we want to see that captured on silicon. So we've done those 2 steps and gate-all-around.

The next step, they say, okay, we want to see that captured in silicon, but on our silicon on our structure, we're going to send you guys wafers. We want you to deposit it on our structure and send it back to us, and we'll evaluate it. Now they know they're not going to get the most perfect performance out of that because the work we have to do together and tuning them up and getting everything to work fully integrated. But they're just trying to do a proof of concept on their platform, right? That's the stage we're at right now with 2 of the customers.

Beyond that, the stage after that would be where they install and do the actual implementation on their device, tuning it all appropriately. So yes, it's a fair question to say when should we expect to see a JDA sometime during -- in this period of us doing the evaluation on their devices and when we get to the point we'll install there because that would involve a license, then we should be having a JDA in place. These companies do not move fast when you're talking about kind of legal agreements. So -- but we're working hard to make those happen, and we hope to be able to announce them at some point in the near future.

Okay. And Frank, the question regarding the equity raise. An investor asked, he is curious about the background and reason for the third-party private placement. And given the stock price rise, was that -- could we have had better timing?

Right. Yes, thanks for that. One of the comments I've made in talking about the capital that we raised in Q1 was some funding that we got via the ATM. And if you look at that, the average price on that was $2.47, which is roughly about where we were trading about 1.5 weeks or 2 before we did the equity raise. And so the $5 price that we executed on there, given what we had seen so far, not only in Q1, but really looking back over the last couple of years, it made us look at this as a very good opportunity because, sure, the stock had run up to $7. And now in the last couple of weeks, it's run up again. But given the past trading levels that we had and again, a lot of geopolitical uncertainty in the middle of February, which we've kind of seen play out since then. Of course, you can't know how the equity market is going to perform. But on balance, it seems like a very good opportunity for us to execute on that.

And then frankly, be able to work toward commercial outcomes and not worry about the day-to-day movements in the stock price to have to use the ATM to keep our balance sheet strong. So we've now strengthened the balance sheet. It's always kind of easier with the benefit of hindsight to second guess the price, but I think it was a very good decision to execute then.

Question on the tool partner. How has your relationship evolved with your tool partner, the strategic partner? And are they giving you more engineering personnel? And how has that relationship changed over time?

Yes, that's a good question. We have been -- we try to be good partners with each of the big tool vendors. There's 3 main tool vendors that the industry uses for epi tools. And we typically want to be kind of an arms dealer work with whatever tool our customers want to work with. So we have good relationships with all of them.

The tool vendor that we have the strategic partnership with we've been working with for more than a decade, and had a good relationship with. But now that we've entered into the strategic partnership, the level of co-development work that we're doing is at a whole new level. So we have weekly meetings with their engineering team where we are working on developing the test data that we need for marketing to customers. And as customers ask us questions and want to get more demos, and we dig in and do work on that together. So yes, on an engineering cooperation level, it's at a whole new level.

The second area is on the marketing and sales to customers, and that's something that we've never really done with them in the past, and that's where we would be developing the right materials for us to both go into target customers and talk about MST technology and what a good solution that is. Now one thing I've calculated a number of times is that if we are successful licensing our technology to customers, in many cases, the tool vendor is going to make more money from us winning designs there than we will. So there's obvious advantages for them making us successful. And so they're not doing this out of the goodness of their heart. But the good news is, I think they've recognized that in the last year since we started this, and we're really seeing the benefit as we're engaging with customers.

Okay. And this is a follow-up kind of to the when moving of the gate-all-around customer -- engagement. But investor asked last -- commented that the last call sounded like 2026, we would see several deals being made. Is it safe to say that now that sounds unlikely? Or is there still hope for inking an agreement this year?

We're only in the fifth month of the year, and I'm hopeful every month that we're going to be inking deals. So definitely, we'd say there's definitely a very strong chance.

And if you look at all the areas in which you are working, which of the segments do you think is closest to producing a royalty-bearing license?

So I spoke a call or 2 ago about wafer-based products. And I think that the development effort in a wafer-based product is relatively easier. So some of the areas where we're offering wafer-based solutions are in gallium nitride and in RF SOI. And there's -- we have wafer-based solutions that we're offering in the memory space. So I think one of those could be the fastest. But we also have been working on power and on RF SOI with customers for a very long time. So those could also be quick time to market. It's very hard to call with so many moving pieces.

All right. And with that, Scott, I'll turn the call to you for closing comments here.

Okay. Well, I want to just thank you all for joining us to hear the progress being made within Atomera. I hope you're feeling the excitement that we are. Please continue to look for our news, articles and blog posts, which are available along with investor alerts on our website, atomera.com. Should you have additional questions, please contact Mike Bishop. We'll be happy to follow up. Thanks again for your support, and we look forward to our next update call.

Thank you. This concludes the call.

Hello, everyone, and welcome to Atomera's Fourth Quarter and Fiscal Year 2025 Update Call. I'd like to remind everyone that this call and webinar are being recorded and a replay will be available on Atomera's IR website for 1 year. I'm Mike Bishop with the company's Investor Relations.

As in prior quarters, we are using Zoom, and we will follow a similar presentation format with participants in a listen-only mode. We will open with prepared remarks from Scott Bibaud, Atomera's President and CEO; and Francis Laurencio, Atomera's CFO. Then we will open the call to questions. If you are joining by telephone, you may follow a slide presentation to accompany our remarks on the Events and Presentations section of our Investor Relations page on our website.

Before we begin, I'd like to remind everyone that during today's call, we will make forward-looking statements. These forward-looking statements, whether in prepared remarks or during the Q&A session, are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission specifically in the company's annual report on Form 10-K filed with the SEC on March 4, 2025. Except as otherwise required by federal securities laws, Atomera disclaims any obligation to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions and circumstances.

Also, please note that during this call, we will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is posted on our website.

Now I would like to turn the call over to our President and CEO, Scott Bibaud. Go ahead, Scott.

Thanks, Mike, and good afternoon to everyone. In Atomera fourth quarter, we made great progress moving existing customers forward in our targeted segment, achieving very strong technical advantages, commencing new customer engagements in nontraditional areas and made our first foray into the world of government-funded collaborative developments, all positioning us strongly for commercial execution in 2026. Today, I will give you an update on all of our activities as we set the table for our business prospects in the new year.

Technology news recently has been dominated by the rapid advancement of artificial intelligence and the associated semiconductor challenges that AI entails from the allocation of limited GBU supply, the enormous stresses put on our energy infrastructure and the associated surge in memory prices. Atomera's technology is positioned to assist with each of these industry issues as we deliver materials, which help to relieve each pain point.

So let me start off with our recent exciting progress on Gate-All-Around transistor technology, which is the foundational architecture used in AI GPUs, CPUs and bleeding edge network components. The challenges with manufacturing these next-generation transistor devices at 2-nanometer and below are widespread and a concerted effort by the full ecosystem of industry players is required to manufacture them at scale with economically viable throughput and yield.

This has been the focus of our recently announced strategic partnership with a large equipment OEM. Target customers or TSMC, Samsung and Intel, who are in production and [indiscernible], a new Japanese manufacturer, which is deep in development. Atomera's MST technology delivers some very compelling solutions in this space, in particular, for diffusion blocking. These tiny Gate-All-Around on transistors require extremely high phosphorotoping levels constrained to a very small area in the source and drain of the nanosheet. Under the intense semiconductor manufacturing environment, it's difficult to keep these [ dopant atoms ] in their proper positions and just a small amount of migration into the channel can severely impact performance, efficiency and yield.

Atomera's MST is uniquely well suited to hold these roving phosphorus atoms in place. Although this MST characteristic is well proven in older technologies, implementing MST in devices that are around 2 nanometers, while maintaining its efficacy is something that industry players insist must be validated on silicon at real world scale, and we've been working hard to do so. Our target customers have been looking into two results to prove high-volume manufacturability. First, that MST can be effectively deposited into the actual nanosheet structure. And second, that the diffusion blocking characteristics are better than other methods, the industry is currently evaluating or using.

Obtaining these results is not straightforward and requires access to advanced structures that are not generally available are very expensive and frequently proprietary. But we've been able to make steady progress with the help of Gate-All-Around customer and our strategic partner. Just in the last month, we obtained very exciting silicon results in both targeted areas, which we believe provides the definitive proof to drive adoption of MST at all four of the world's Gate-All-Around customers in the future.

Not only can MST be deposited into those structures using existing tools and standard gases but it is a far superior diffusion blocking material than those currently used by the industry. We anticipate that we will be able to implement this technology with leading industry players over the next few quarters.

Of course, we're quite excited by these recent results since our advanced node, our Gate-All-Around business segment has extremely high revenue potential. But we're also making convincing progress in our other customer areas, so let me provide a short update there.

In DRAM, the technology road map is at a key inflection point as DRAM finally follows other logic and memory architectures in making better use of the vertical dimension. We are getting involved in offerings to enhance the performance of next-generation architectures in addition to solutions for products currently in production by the major memory suppliers.

During the last few months, we have had two major solution offerings that we're working hard to validate since their market potential is very high. Notably, these are both wafer-based solutions, which are easier to adopt and test, avoiding many of the integration complexities required in some of our other applications. And with the current robust market for memories, we believe our potential customers will have a generous R&D budget to pursue these ideas.

Atomera is currently conducting many wafer runs with our various customers. Most of these are processing through their fabs, so we will expect more information soon. One customer has just gotten preliminary results, which look promising. But we will get a better view when the final data is available in about a month. If the results look good, we'll be pushing for a joint development agreement and a license to advance this technology to production.

In the RF-SOI space, our offering is very strong, considering that it can provide performance improvements for multiple important areas, including for the RF switch and the low-noise amplifier. Because we are working with so many of the key players in this industry, including foundry and fabless suppliers, we hope to drive adoption broadly. Again, in this space, our solution can be implemented with a wafer-based solution, meaning our customers can choose to deposit it on wafers themselves before starting their full manufacturing process or they can even buy RF-SOI MST wafers from a third-party supplier. Our license structure supports both of these approaches.

In power, we are working with some very large players to ultimately be incorporated into their product offerings. Although we had a setback with ST last year, we continue to work with them on MST solutions across multiple business units. In addition to our traditional BCD business opportunities, this quarter, we had several other inbound interests emerge for power applications. Through our own internal analysis and modeling, we have uncovered an opportunity for MST entrench bets, which are an important component in optimizing energy efficiency in AI data centers. Our simulation show the potential for MST to improve performance by more than 40%. We got this to result after Christmas and already have a customer interested in kicking off development.

Similarly, using our MST [indiscernible] simulation capability, we have demonstrated how MST can improve HBT devices, which are high-speed transistors frequently used for amplifying and switching signals in RF communication systems. Discussions are underway with a potential first customer in this application as well.

In GaN, I'm happy to report that our first customer -- commercial customer has now started running wafers for GaN on silicon with MST technology. For many reasons, this is exciting. This large customer can grow their own GaN wafers and manufacture electrical devices on them, which means they can move even faster than our in-house work with Sandia National Labs in Texas State. So we expect that we will actually move ahead of our own internal development efforts over the next few quarters.

Second, they are exploring GaN in both RF and power technologies. These independent efforts by multiple industry and scientific partners frequently can accelerate time to revenue, which is what we're hoping to accomplish. Last month, we announced that our GaN on Silicon concept paper had been approved to move to the proposal stage for a project with Power America to advance the state-of-the-art and wideband GaN materials.

We announced this for a variety of reasons. First, we wanted to show the widespread interest from customers, the science community and industrial organizations for an MST solution for GaN on Silicon. Indeed, we've already received several letters of support for multiple future customers showing interest in this solution. Second, this concept paper was our first application for outside development funding. And although the funds sought for this first effort are modest, they put us in the pathway for a variety of future material development funding opportunities, which can provide us assistance going down the path we are planning to travel anyway. By engaging in these joint development opportunities, we are promoting our technology, receiving financial assistance and assuring a customer base all in one project.

To summarize, the past few months have been an incredibly productive time in terms of technical development and the buildup of a variety of new customer opportunities that I believe will lead to business deal announcements later this year.

Finally, as we close out 2025, let me give you a thought on -- a few thoughts on our accomplishments. Last year, we took our early development and simulation results on Gate-All-Around and converted it into what I now believe is our greatest company opportunity. We did that through working with a lead customer and with a strategic partner who is also a major equipment OEM. This is a significant departure from how we've approached the market in the past. The industry has a long history of relying on this OEM to deliver them material solutions for their problems. So we truly believe that their influence will help us to convert our recent strong technical results to licenses and revenue.

We made technical breakthroughs in our other core markets to enable tiller applications like LNA for RF-SOI, a new architecture for BCD and next-gen DRAM solutions. Using AI, our development team has gotten better results more efficiently than ever before. We kicked off a record number of wafer runs without leading customers, initiated several new projects and solidified the business talent on our team, which should lead to further contract announcements over the course of this year. And much of this work was done, emphasizing wafer-based products, which we believe will result in faster time to revenue. In short, 2025 efforts have set us up well for commercial announcements later this year.

With that, I'll turn the call over to Frank to review our financials.

Thank you, Scott. At the close of the market today, we issued a press release announcing our fourth quarter and full year results for 2025. This slide shows our summary financials. Revenue in 2025 was $65,000 and consisted of NRE fees for wafer deliveries and MST CAD licensing. Our GAAP net loss for the year ended December 31, 2025, was $20.2 million or $0.65 per share, compared to a net loss of $18.4 million or $0.68 per share in 2024. On a non-GAAP basis, 2025 net loss was $16.1 million or $0.52 per share. And 2024 net loss was $15.4 million or $0.57 per share.

GAAP operating expenses were $20.9 million in 2025, which was an increase of approximately $1.5 million from $19.3 million of GAAP operating expense in 2024. The main driver of the increase in GAAP operating expense was a $1.1 million increase in stock compensation expense due to a change in our executive equity-based compensation.

In Q1 2025, we implemented PSUs for executives which vest based on the performance of our stock price as compared to the Russell 2000 Index. These PSUs vest over 3 years whereas the options and time-based RSUs that had been granted to executives in prior years, vested over 4 years. Although the vesting period is shorter, executives only vest in PSUs based upon our stock price performance.

With the exception of stock compensation expense, the drivers of GAAP and non-GAAP expenses are substantially the same. And therefore, the rest of my remarks will only refer to non-GAAP results. Please refer to the slide presentation for a reconciliation between GAAP and non-GAAP expenses.

Total operating expenses in 2025 were $15.9 million, an increase of $429,000 from $15.4 million in 2024. R&D expenses increased by $794,000 from $9.4 million in 2024 to $10.2 million in 2025, primarily due to a $676,000 increase in outsourced engineering as we utilize various new device fabrication vendors replacing TSI semiconductor.

G&A expenses decreased by $272,000 from $5.1 million to $4.8 million, primarily due to a $421,000 decrease in compensation expense, offset in part by $118,000 increase in professional fees for legal, IP and audit fees.

Sales and marketing expense decreased by $94,000, reflecting lower head count but offset by some recruiting fees.

Company-wide, our compensation expense, again, on a non-GAAP basis, excluding stock compensation, declined by $582,000 in 2025 compared to 2024. The reduction in compensation expense reflects our Board's pay-for-performance discipline. While we achieved important technical milestones in 2025, the Compensation Committee determined that payout of the full executive bonus was not justified by commercial progress made during the year. Therefore, the committee withheld approximately $669,000 in executive bonus compensation affecting the full executive team. The withheld amount may be earned in 2026, based on achieving rigorous commercial objectives.

Turning to our quarterly results. Fourth quarter 2025 non-GAAP net loss was $3.3 million or $0.10 per share, compared to a net loss of $4.4 million or $0.14 per share in Q3 and a net loss of $3.9 million or $0.14 per share in Q4 2024. Non-GAAP operating expenses decreased by $1.1 million to $4.3 million -- sorry, from $4.3 million in Q3 2025 to $3.2 million in Q4, primarily due to the reversal of our bonus accrual, which occurred in Q4.

Our balance of cash, cash equivalents and short-term investments on December 31 was $19.2 million compared to $26.7 million at the end of 2024 and $20.3 million at the end of Q3 2024. We used $14.9 million of cash in operating activities during 2025, $3.2 million of which was used in Q4.

During 2025, we sold approximately 1.6 million shares under our ATM facility at an average price per share of $5.15, resulting in net proceeds of approximately $7.6 million after commissions and offering expenses. As of December 31, 2025, we had 32.4 million shares outstanding. After year-end, we've raised an additional $3.2 million of net proceeds by selling approximately 1.3 million shares at an average price of $2.47.

For Q1, we expect to recognize revenue in the range of $50,000 to $100,000 from shipment of MST wafers to customers. Consistent with our usual practice, we are not providing revenue guidance beyond this quarter.

Our 2025 non-GAAP operating expense was $15.9 million, which is well below the guidance range I provided last quarter. That's primarily due to reversing $669,000 of accrued bonus. For 2026, we will continue to aggressively control costs, and we've limited our expense growth to those areas directly related to revenue and near-term commercial progress. Those increases mainly consist of adding two senior go-to-market leaders. The first of those was our VP of Sales, who came on board in October, and the next will be a new Head of Marketing.

The comparison of our planned spending in 2026 versus 2025 looks distorted by the potential payout this year of the executive bonus withheld from 2025. And because withheld amount will have to be accrued this year on top of accruing 2026 bonus. As a result, we expect our non-GAAP operating expense to be approximately $18.5 million in 2026.

Now on paper, this is a 17% increase. But if normalized for the timing of the executive bonus accrual, it is more in the range of 8%. I would point out also that earning back deferred executive bonuses as well as earning 2026 bonus will require us to execute against aggressive, commercially focused milestones.

With that, I will turn the call back over to Scott for a few summary remarks before we open the call up to questions. Scott?

Thank you, Frank. The entire focus of our efforts in 2025 is getting to commercial agreements. The work we've done up to now have positioned us well to close on those opportunities and I look forward to sharing our successes with you as the year progresses. Mike, we will now take questions.

[Operator Instructions] And right now our first question comes from Richard Shannon of Craig-Hallum. Richard, go ahead.

Great, Mike. Can you hear me?

Yes. Yes, we can.

Okay. Great. I'm in the airport here. A little bit of noise, so apologies for that. I don't have a ton of time before I got to run to my plane here. But let me ask just a few questions here. Scott, some really interesting statements regarding Gate-All-Around here. If I caught your comments correctly here, you said that you're expecting some -- I forgot the exact language you used, but some sort of important next steps here in the next few quarters. typically, you've been reticent to give somewhat definitive time frames for getting to major milestones and that you are here.

So maybe give us a sense of why you're saying this. Your confidence level is clearly quite high. So help us understand this level of confidence and why?

Yes, I would say on the Gate-All-Around technology, let me -- do you mind if I just share this slide to answer your question, Richard?

Please do.

Okay. On the right-hand side, you can see where MST is deposited around the source and drain structures. That is an incredibly hard thing to do. We've been talking with our Gate-All-Around customers about using MST to block dopant diffusion like where these little red arrows going to 1 of the biggest problems that people have is that the phosphorus opens get into these channels here. And the channels can only handle a couple of phosphorus atoms before they really start to agree very significantly, which affects yield and performance and so forth.

So all along, they've been saying, okay, that's interesting. We know MST can block the phosphorus. But first of all, can you even deposit it in these tiny little structures that are -- they're 2 nanometers. And just to give you an idea, it takes about 100,000 nanometers to get to the width of a hair. That's how small these are. And so we had to prove that, and we spent a long time in the lab building devices like this to show that we can deposit MST with high quality there, and we have done that.

Second thing is when we put that tiny layer of MST, does it really still block the phosphorus in that very, very small space because they're using something else right now that isn't very effective at blocking it, but are we better than that of the thing? And the answer to that question is, yes as well. We've recently just gotten the technology -- gotten the test data to prove that.

And so it's early days. We've gotten that in the last month. We haven't been able to get out and talk to each of the data all around customers yet, but with our partnership, with our strategic partner, we really think we're going to talk to those guys, and they're going to immediately want to start testing that and trying it. So I'd say that's why my confidence is much higher. I would say we've rarely been as excited about some technology results inside the company as we are by what we have right now.

Okay. Great deal. I'm sure I'll follow up a little bit on that one. Second other -- second question here is, you mentioned some -- you mentioned two things you have to prove, you are better than alternative solutions. We haven't really heard you talk about what other -- what your potential customers are considering here. Any way you can describe what those are, whether they're internal developments or something looking from other research organizations and to what degree you have visibility into how well those are doing as well?

Yes. So they're not -- we're not really talking about some lineup of other technologies. But what the industry has tried using in the past is silicon arsenic, and silicon arsenic is effective at just putting a spacer between the phosphorus and the channel, but it doesn't really prevent the dopant diffusion very well at all. And so we've actually done a lot of testing of our MST technology against silicon arsenic and proven that we have vastly better diffusion blocking results.

And the second thing is that the industry does not like to use arsenic in its manufacturing process -- that can help it. It's expensive to use and dangerous and therefore, offering a solution that removes that material is probably considered good by the industry.

Okay. Fair enough. Very interesting here. My last question before I've got to run here, Scott, is you talked about a number of inbound calls here in the power space, which I know it's a space that you've been pushing for a while. And obviously, STMicro was aiming towards that before it's, call it, set back. You'd characterize this in the RF-SOI space a few years ago about having significant coverage, I think, more than half of the market share of the space here. Anyway to characterize how much of the power space you're covering with -- when you add up all these new companies that are coming to you? Any way you'd characterize that?

Yes, it's a little bit harder. I think on RF-SOI, it's a pretty compact group of companies, and we feel very confident that we're working with the vast majority of them. On power, it's a much bigger market. It's a much more diverse customer base. So I wouldn't say we're working with most of the people, of course, -- we -- like we talked a little bit about the work we've done in TrenchFET when we did do some work on TrenchFET. We reached out to the leaders in TrenchFET and some other folks that we know are interested in advancing their technology and started talking to them and that worked well and the same thing with HBT.

And so yes, I think we're expanding -- and then a lot of the GaN work that we're doing is in power as well. So we're talking to a lot of companies working in the power space, but I can't really give you -- I can't really say it's the vast majority in that case.

I wasn't expecting the vast majority, but since the power space is very large. Well, I thought if there was -- I mean, if you even had 10% or 20%, that would be a pretty good coverage there. But I appreciate that characterization. I've got to jump out of line, Scott.

All right. Thank you, Richard.

All right. Thank you, Richard. We have some questions coming in on the Q&A line. Although I will start with one, Scott, do -- can you give an update on the progress for your Vice President of Sales, Wei?

Sure. Wei joined in October, and he's been coming up to speed and generally very, very helpful. I'm super enthusiastic about having someone who's pushing the team as hard as he is on the sales side. He's not only driving our efforts very specifically with existing customers and helping us find some new ones. He's also targeting a bunch of relationships that he's had in the past that he's bringing in with us and that does allow him to -- for us to engage with customers from kind of a different angle, and that's been very positive. So I think so far, so good.

Great. And a number of questions about wafer activity at the fab. And as it relates to general activity level, how would you characterize that?

Yes. So I think just starting earlier in the middle of 2025, we started to get a lot of customers coming in with wafer run simultaneously, which is quite busy for us to get them into our fab and deposit MST on a very high-quality basis and they get it back out, so they can start running the wafers. Today, we're still running things in our own fab, but for the most part, we've shipped out a lot of that stuff out to our customers.

And now we're kind of in a waiting game, it takes 6 to 9 months for customers to run their wafers once we send them back to them and then get the test results, and then we'll review those and we'll figure out the next steps from there. But we really feel confident that what we have done in these runs is good stuff. We use MST CAD simulation software to figure out what we expect the outcome of these runs to be and we're really hopeful that our TCAD has been accurate. And if we get the results that we hope for, that our customers want to move forward into a productization effort.

Okay. And generally speaking, I have a question here, and I think we've covered it on prior calls, but can you describe why selling blank wafers makes it easier to go to market?

Yes, absolutely. Okay. I just showed this graphic of a Gate-All-Around device, and that is a really, really hard device to integrate into. But you can imagine when -- if we're trying to integrate into that device, the customer starts a starting wafer, they build up a whole bunch of structures. And then at some point, they make a hole in those structures and they say, okay, put your MST in here. And then we'll have to figure out how to fill around it and all of the different layers that surround it affected, right? That's called integration engineering, it's very challenging.

But for many of our applications, we talk about wafer-based products, that would be when the customer buys a wafer, and they put MST on immediately, the blank wafer. And then they start processing their -- all of their -- the rest of that process on top of it. Therefore, we don't have to work through all those challenging integration issues that we would have for something that where MST gets deposited in the middle.

So today, I talked about a couple of applications we're looking at for DRAM that would be wafer-based products, where we're shipping them to wafer. I mean, obviously, we won't be wafer manufacturers, but we would help the most solution that would go right on the wafer. RF-SOI, our solutions that are wafer-based products and also our gallium nitride, our GaN solutions are wafer-based products. So we've talked about it before. We're excited about those because they're easier to integrate, and therefore, we think faster time to revenue.

Okay. Great. Here's another one. Can you please explain more about power saving in AI than how MST can help achieve that?

Yes. So it's a lot of ways. I just showed you the Gate-All-Around transistor. So fundamentally, in semiconductor manufacturing like that, if you can bring a performance improvement, you could also probably trade that off to get lower power if you chose to do so. So that's one way.

Another way is with our power solutions like on our BCD products or our TrenchFET products or our GaN products. Those are targeted for the type of electronics that will be developed that go into AI data center to help lower the power in the racks.

So I'll give you one industry dynamics that we're tracking in AI data centers. They have historically used a 12-volt power supply on the rack. But recently, the industry is moving away from 12 volts and they're moving to 48 volts because 48 volts is 4x more efficient at saving power when you're providing power to the racks for all of those servers. The 48-volt power supplies use a lot of TrenchFET devices. That's the primary device that they use in there. And so we are trying to offer solutions for TrenchFET, so we can help to address that.

The other thing is gallium nitride obviously, a very power-efficient devices. Those of you who have the small power supplies that go into your backpack or suitcase like they weren't able to do before you understand that those are much more efficient, and that's why we're trying to engage in gallium nitride.

Interesting. Thank you. Okay. Can you give us an update on your JDA1 and JDA 2?

Yes. So and JDA 1, I have to be careful that I'm not kind of divulging too much about what they're working on. But we continue to have to be working with JDA 1, and I'm hopeful that some of the technologies that I talked about today will kick them into high gear to -- in a business unit to kind of move that forward towards a production development effort like we've been waiting for, for -- honestly, for a little bit too long. JDA 2 is one of the customers that is currently running wafers with us. And so I can't say too much about exactly where they are right now, but they're running wafers.

Great. And going back to the Gate-All-Around, is MST being evaluated at the customer's fab at this point?

Yes. So we mentioned that we're working with one Gate-All-Around customer today who helped us -- so when I showed that structure, and I showed that we had to do deposits inside there, you really need to work with someone to get access to those wafers to try out things on those structures. And the good news is we have been working with one of the Gate-All-Around potential customers to evaluate MST today. So yes, we are in one of them. I hope to be in all four of them.

Okay. And when do you expect an evaluation to be completed of the wafers.

For Gate-All-Around or?

Yes. For Gate-All-Around.

For Gate-All-Around, it's very hard to say with some of the customers we're planning our visit to show them all this data that we have. We believe that the data that we have is good enough that they may not even require us to do deposition inside their Gate-All-Around structure because we've proven that we can physically do it. And then what we'd be trying to do is to convince those customers to install MST in their fabs and have their R&D team take over and start implementing this.

How fast that will happen? It's hard to say, but I will say the people that are working on Gate-All-Around are working very fast -- and if they adopt, they're going to be pushing us as hard as we ever been pushed by a customer in the past.

Okay. Great. And just one last question here is on how MST can help or improve quantum computing.

It's interesting. That's something we're working on right now. I don't really -- I can't really talk about the way that our MST technology will address quantum, but I can tell you that's something we're working very hard on right now. In the past, we had a theory about MST's ability to improve the purity and availability at a cheaper price of Silicon-28, which is a critical wafer type that's used for quantum wells. But we -- yes, that really just didn't pan out. So we're working on other technologies right now. And I hope we'll be able to talk to you guys about that later this year.

And Scott, you can proceed with any closing comments.

All right. Well, I guess -- I want to just thank you all for joining us to hear the progress being made here at Atomera. Continue to look for our news, articles and blog posts, which are available along with investor alerts on our website atomera.com. Should you have additional questions, please contact Mike Bishop, who will be happy to follow up. Thanks again for your support, and we look forward to our next update call.

Thank you. This concludes the Atomera Fourth Quarter Conference call.

Hello, everyone, and welcome to Atomera's Third Quarter 2025 Update Call. I'd like to remind everyone that this call and webinar are being recorded, and a replay will be available on Atomera's IR website for 1 year. I'm Mike Bishop with the company's Investor Relations.

As in prior quarters, we are using Zoom, and we will follow a similar presentation format with participants in a listen-only mode. We will open with prepared remarks from Scott Bibaud, Atomera's President and CEO; and Frank Laurencio, Atomera's CFO. Then we will open the call to questions.

If you are joining by telephone, you may follow a slide presentation to accompany our remarks on the Events and Presentations section of our Investor Relations page on our website.

Before we begin, I would like to remind everyone that during today's call, we will make forward-looking statements. These forward-looking statements, whether in prepared remarks or during the Q&A session, are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 10-K filed with the SEC on March 4, 2025.

Except as otherwise required by federal securities laws, Atomera disclaims any obligation to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions and circumstances.

Also, please note that during this call, we will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is posted on our website.

Now I'd like to turn the call over to our President and CEO, Scott Bibaud. Go ahead, Scott.

Thanks a lot, Mike, and good afternoon, all. This has been a quarter of both challenge and validation, one that underscores the reality of bringing a new material technology to market and the opportunities that come when you solve fundamental problems for the semiconductor industry. I'll start by addressing our update with STMicroelectronics and depart from our regular format to review the broader picture, the momentum we're building with new customers and the different market opportunities that Atomera's technology is being used to address.

As many of you have seen in our announcement, our work with STMicroelectronics on their smart power platform reached an inflection point this quarter. During this program, we were tackling a very difficult performance trade-off for their 200-millimeter platform. We achieved what we set out to do, significant performance improvements in key device metrics. However, that higher performance came with a corresponding reduction in device lifetime, often referred to as reliability, which failed to meet all of ST's specifications.

Over many months, our 2 teams worked closely to resolve this trade-off. Then ST, as part of a reshaping of its manufacturing footprint, announced they would discontinue development on 200-millimeter wafers to focus exclusively on 300-millimeter for the next-generation BCD110 platform.

At about the same time, Atomera discovered a new MST implementation validated through our TCAD simulations that doubled our performance improvement without the associated reduction in device lifetime. In other words, we found a way around the trade-off, and improvement only made possible by using MST.

Over the last few months, ST validated our findings for the new implementation. However, because this new version required a device architecture change that would take multiple learning cycles to validate, they determined that they could not incorporate it and still meet their aggressive BCD110 launch schedule. Therefore, ST informed us that they will take BCD110 to market without MST, and currently, they have no plan for a future variant that includes it. That means we no longer have a line of sight to royalty revenue at ST for this particular program.

While that outcome is certainly disappointing, there are several important positives I want to emphasize.

First, at STMicro, we demonstrated significant performance gains and proved MST's integration capability inside a Tier 1 production fab.

Second, we've now developed a very high-performance solution that eliminates the performance reliability trade-off, which is a significant new differentiator for us going forward, one that we are already actively discussing with other players in this market.

And third, ST has reiterated their intent to continue working with us in other technology areas where MST could add value. Under their license with us, they continue to run experiments across several different businesses.

This chapter with ST underscores that moving a new material into mass production is rarely linear. But the learning from this effort makes us a stronger -- gives us a stronger foundation as we engage with others in the same power market segment, including with a very large existing customer and even a new engagement that began this past quarter. Customers are now evaluating MST for power devices between 5 volts and 48 volts. It's important to keep in perspective that ST is only one of many large customers we are working with today to take MST into production in the power area.

We also have 3 other very active technology focus areas. In the Gate-All-Around space, there are 3 large competitors and one that's still emerging. We're working with or in discussions with all 3 of them. I mean, all 4 of them. In the DRAM space, there are 3 large manufacturers, and we are engaged with 2 of them right now and have good relationship with the third. In the RF-SOI area, we're doing integration work with 4 different fabs and a fabless player right now with many of them running wafers. So you can see that we have no lack of opportunities across several different segments. Indeed, during the last 3 months, we processed a record number of wafers for our customers.

When we look at all these opportunities, it's helpful to understand how we prioritize our business in terms of revenue potential. The first being the fastest time to market, second being the highest return on investment and the third being breakthrough long-term growth. One of the fastest ways to get Atomera's technology to market is through applications which use MST deposited on top of the starting wafer rather than inserted into the middle of the manufacturing line.

There are many reasons why this can accelerate revenue. First, customers can simply acquire an MST starting wafer and run it through their standard production flow with very few process modifications for an easy experiment. They don't have to install MST, deal with the complications of wafers being transferred in and out of their fab, make major changes to their process to integrate it or complete a license agreement.

The price of MST can be built into the cost of the starting wafer, which gives Atomera the same revenue, but the customer will not view the cost as a royalty. And it's certainly faster to get MST starting wafers qualified than something integrated into the middle of the process. Today, we use MST starting wafers in our work in RF-SOI, in GaN and possibly soon in next-generation DRAM. We actively seek out these implementations because of the relatively easier integration and shorter path to revenue.

The second set of applications have enormous revenue potential, but the development process can be more demanding because MST is inserted into the middle of a complex set of production steps. It is worth it, though, because the upside represents a massive return on investment, including in the areas of Gate-All-Around logic, DRAM, power devices and other memory products. One design win here will ensure the future success of the company. And as I mentioned earlier, we have at least 6 or 7 of those efforts underway today.

In Gate-All-Around and advanced memory, our partnership with a leading capital equipment company announced earlier this year is showcasing our competence at advanced nodes. Using their test infrastructure, we've been able to validate MST's ability to reduce contact resistance, improve channel reliability and be deposited in the tiny structures of nanosheet transistors.

We are very excited by the deep cooperation and customer interest generated through this partnership. This quarter, we'll be hitting the road on joint visits with our customers to persuade them that issues in their manufacturing process can be solved using MST. The weight of our partners' endorsement cannot be overstated.

Finally, we have an abundance of new breakthrough materials enabled by MST under development in the background through commercial partnerships and university collaborations. For many of them, we've already filed fundamental patents, and we're now in the process of making prototypes and understanding their capabilities. This is the type of program, for instance, which launched our GaN work.

We have a dozen similar initiatives in early investigation, several of which might become near-term disruptive technology announcements in areas like quantum computing, AI server power, high-bandwidth memory architectures, piezoelectric devices, optical networking and a variety of other areas, which have the potential to enable entirely new applications.

Farming out the early R&D whenever possible, allows Atomera's core team to keep a laser focus on the nearer-term revenue opportunities and apply more resources only when we see the potential of these innovations coming to fruition. Our gallium nitride initiative continues to deliver exciting progress. In collaboration with Sandia National Labs, we're in the process of completing device fabrication to highlight our improved electrical performance.

Prior results have confirmed MST's ability to enhance GaN growth on silicon substrates, a major barrier for high-volume production and have garnered interest from our first commercial customers. We hope to release a complete data set publicly later this year, which will be the precursor to a full-scale rollout. As we continue our GaN work with Sandia, they are now seeking to expand the areas of R&D engagement on a range of Atomera technologies corresponding to their highest priority development areas.

The semiconductor industry is clearly entering a new materials innovation cycle. Across logic, memory, power and RF, engineers are hitting the limits of conventional scaling. They're searching for material solutions that can boost performance, improve reliability and reduce variability, exactly where MST delivers value. This is particularly true in AI infrastructure and data centers, where the demand for power efficiency and thermal management is driving renewed focus on device-level innovation, which MST can deliver.

One of our principal challenges is to ensure that potential customers know about MST -- and that is why I'm so excited to welcome Wei Na as our new VP of Sales. Wei has had experience growing a semiconductor technology licensing business very much like Atomera from scratch, selling to the exact same customers we are addressing, and we believe his leadership will help us both grow sales and convert existing opportunities into licenses.

Our priorities remain clear: emphasize MSD starting wafer products like RF-SOI and existing engagements to get to production and revenue as quickly as possible; 2, leverage our strategic OEM partnership to advance active engagements in Gate-All-Around logic, memory and power through our comprehensive silicon test results and early licenses; 3, bring MST for GaN technology to a customer-ready stage with shareable electrical data; and 4, maintain fiscal discipline as we transition from R&D validation and integration to revenue-generating licenses.

Our mission hasn't changed. It's to enable better, faster and more efficient semiconductors through advanced materials engineering. That mission remains as relevant as ever. I want to thank our employees, our customers and our shareholders for their continued confidence and support. Every quarter, we move closer to the point where MST's impact will be felt across multiple product lines and foundries worldwide.

With that, I'll turn the call over to our CFO, Frank Laurencio, to review our financials.

Thanks, Scott. At the close of the market today, we issued a press release announcing our results for the third quarter of 2025. Our summary financials are shown on this slide.

Our GAAP net loss for the third quarter of 2025 was $5.6 million or $0.17 per share compared to a net loss of $4.6 million, which was also $0.17 per share in Q3 of last year. GAAP operating expenses in the third quarter of this year were $5.7 million, an increase of $857,000 from $4.8 million in Q3 of 2024. This was due to a $544,000 increase in R&D expenses, reflecting both higher outsourced device fabrication work and increased compensation expenses and the $353,000 increase in G&A expenses, primarily consisting of higher stock compensation expense.

Sales and marketing expenses were basically flat. Non-GAAP net loss in Q3 2025 was $4.4 million compared to a loss of $3.9 million in Q3 of last year due to a $423,000 increase in non-GAAP operating expense, primarily reflecting the higher R&D expenses I just discussed.

Stock compensation expense, which is the main difference between GAAP and non-GAAP operating expenses was $1.3 million in Q3 of 2025 and $907,000 in Q3 2024. The increase in stock compensation expense, which is noncash, reflects the adoption of performance-based RSUs or PSUs for executive equity-based compensation in March of last year. PSUs vest over 3 years rather than 4 years as is the case for time-based RSUs. However, PSUs will only vest if we deliver shareholder returns that meet minimum targets relative to the Russell 2000 Index. Sequentially, Q3 2025 non-GAAP net loss of $4.4 million compares to a $4 million net loss in Q2, primarily due to higher R&D expenses.

Our balance of cash and cash equivalents as of September 30, 2025, was $20.3 million compared to $22 million as of June 30, 2025. We used $3.4 million of cash in operating activities during Q3 compared to $3.5 million in the second quarter of this year. During Q2 -- sorry, during Q3, we raised approximately $2 million under our ATM facility, net of commissions and expenses by selling approximately 393,000 shares at an average price of $5.23. Since the end of the quarter, we've raised an additional $836,000 from sales of approximately 171,000 shares at an average price of $5.03. As of today's date, we have 31.7 million shares outstanding.

In Q4, we expect to recognize between $75,000 and $125,000 of NRE revenue from wafer shipments to customers running the demos that Scott mentioned in his remarks. Those shipments and the associated revenue recognition will happen in Q4 as well as into next year. Gross margin was negative this quarter because a portion of the cost for MST deposition on those wafers was incurred during this quarter, but the revenue will be recognized as we ship the wafers going forward.

Moving to expenses. I expect our non-GAAP operating expense for the full year 2025 to be in the range of $17.25 million to $17.50 million. Sales and marketing expenses ticked up last quarter in connection with recruiting for both sales and marketing leadership roles. The compensation expenses associated with those roles are built into our plan. Our recruiting efforts have started to pay off with the hiring of Wei Na as our VP of Sales.

With that, I'll turn the call back over to Scott for a few summary remarks before we open the call up to questions. Scott?

Sorry, a little trouble with the Zoom controls here.

Thanks, Frank. Across all of our technology focus areas, we have strong developments underway with the leaders of the industry. I hope today, we've given you a sense of our wide and deep potential to deliver important material solutions that will ultimately make Atomera a financially successful technology provider across many different semiconductor segments. I appreciate you taking the journey with us.

Mike, we will now take questions.

All right. Thank you, Scott. [Operator Instructions] Right now, our first question comes from Richard Shannon of Craig-Hallum.

All right. Great. Hopefully, I'm unmuted here, Mike.

You got it.

All right. Excellent. Thanks Scott and Frank, let me ask a few questions here. Scott, maybe let's do a redux on STMicro. So I guess my first question here is, so it sounds like you did a new design on 300 millimeters that you validated in your simulations, but there would have been multiple cycles of learning to validate for ST. So is that trying to match your simulation to the real world to their simulations to make sure that it worked, and that cycle time was just too much to fit within their time frame getting to 300-millimeter. Is that the kind of the dynamic here that led them to their decision?

Yes. So first of all, the work -- the new implementation we came up with would have worked on 200-millimeter or 300-millimeter. And actually, if you let me digress one second here, Richard, because we've gotten a number of questions that have come in where people were asking, when did you know about this trade-off between the reliability and performance.

Every time you do a development, it's about trade-offs. You're doing a trade-off on one thing -- I mean, you get -- that's why we always talk about cycles of learning. You get some big improvement in one area, it breaks something else. And then you have to go in and you have to work to fix the other thing and try to get to a point where it's all balanced out. So this trade-off work that we were doing is not at all unusual. It's what we do with every customer all the time.

What is unusual is that because they made the transition from 200 to 300, (sic) [ 200-millimeter to 300-millimeter ] we lost the ability to bring in that ultimate solution and get it done for them in time because the 300-millimeter delayed their development efforts and then they needed to get into production fast, and so they just didn't have time to run the validation runs to get our new thing proven out. I'm not sure that answered your whole question. Let me know.

I guess the point here is that it sounded like they were confident that this solves not only the performance, but the reliability issue that you discovered in 200-millimeter, and it was just the time frame that was too tight for them to want to continue right now?

Yes, that's right. Originally, you asked about the simulation work. So we do simulation based on what we believe a customer's process -- manufacturing process is, but that's usually very secretive. They don't give anybody that information exactly. We can make our best approximation. And so we made a TCAD simulation that showed, yes, we really got this great improvement. And we gave it to them in this summer.

And then they spent the next 2 months running their own simulations. Their simulations are very exact to their own manufacturing process. And so what they did was they put in all the improvements we saw -- we proposed. And they came back and they said, "You know what, when we run our simulation, it also brings that level of improvement." So ultimately, I mean, the good news here is that they confirmed it. It makes us feel very confident to bring it out into the market as a new product. And it also makes us confident that at some point in time, we're hopeful we can reengage with ST on that particular product and have them take it forward and make it -- put it into their process.

Okay. All right. Fair enough. Let me follow up on one other comments you made related to STMicro and then we'll move on to some other topics here. So what seems obvious and you just commented on is the ability to take some of the learnings from the process with ST and take it to other customers in the power space here. What have you been able to do so far? Can you use similar kind of structures that you've built with ST and use those with other power customers? Maybe just kind of give us a sense of the benefits you can see from the situation.

Yes. Exactly. So what we did with ST, there's a technique and architecture that the industry has known about for some time, but it hasn't been implementable. When someone builds it, it causes too many things to break and nobody has ever been able to get it to work. But because of the way MST works, because of the way it prevents dopants from diffusing uncontrollably, we believed that we could get that process to work. So this is not like something no one's ever heard of. It's something that -- one of those theoretical things that no one has been able to get working well and now we can get it to work well.

And so yes, it's -- we're not taking anything from -- any proprietary ST information. This is like a standard design technique that we can suddenly make work because of MST. And so yes, we can take that out to other customers, and they kind of understand the concept immediately.

Okay. All right. Fair enough. Let's move on here. In the last number of quarters, you've talked about transformative customers here. And unless I missed something, you didn't necessarily use that phrase here today in your prepared remarks. But I think you did mention a large demo run, which I think refers to one of them. And I think is also contributing to some of the revenues this year. I will ask a question to Frank on the revenue side here in a second here. But maybe just kind of detail where we're sitting with the transformative customers.

And I do want to hit on one specific point that I had a question on. I actually asked Mike Bishop offline earlier today, and he said to ask this question of you, which is you've talked about 2 or maybe 3 of these customers. I want to make sure how many we're talking about and which ones are still ongoing versus any ones that may be stalled. So if you can enumerate that first and then discuss what's going on with this large demonstration you talked about last quarter, and I think you briefly mentioned today, that would be great.

Okay. Yes. I know everybody is frustrated with the code words, and I am too. But we -- so in January or February, we unfortunately had to announce that one customer that we had called transformative had discontinued our -- we were negotiating a deal and they had backed out of the deal. And that customer, we continue to have good relations with them. We talk with them regularly, but we are not on an active engagement with that customer right now.

In that same call, which I think was early -- was in February. We mentioned 2 new transformative customers that were getting underway. And yes, we are working very actively with them. When we talked about a record number of wafers that we're processing, it includes those 2 customers that we call transformative back then.

And so now today, I mentioned these 4 different segments and how we're working with a lot of customers. And then I broke it down by revenue potential and the folks in the middle, folks that are doing Gate-All-Around, folks that are doing DRAM, there are really big players who are doing power and other memory architectures. They are all massive and they're all customers that I would call transformative and so we are -- we're working with more than just those 2 that I mentioned on the call.

More than just the 2 that you would refer to as transformative. Is that what you're saying, Scott?

Yes, yes.

Okay.

I mean I -- just discontinue the term transformative. [ We're good. ] These 2 customers I spoke about as transformative in February are just very, very large revenue potential customers with very big processes that we hope to get going on. But we're also working with other customers who are also very large and have the potential to be transformative.

Okay. Well, let's talk about the specific transformative customer you talked about last quarter that you're doing a large demo run here. What's the update on what's going there? And is that leading to at least some contribution to the revenues you're guiding to this quarter?

Yes. Maybe I'll let Frank answer that. But -- so one of the -- there's some trickiness about when we book revenues. And so we have a lot of customers. The revenue that we're putting out this quarter is based on several customers. I can't answer whether that specific one is in Q3 or it will be in the guidance that Frank gave for Q4, but it's -- yes, we're getting revenue from wafer runs with that customer.

Yes, that's right. I mean, the revenue guidance actually covers multiple customers, 3 different customers. And it's spaced out over time. And while I don't like to show negative gross margin, the timing issue gives a little bit more visibility in the sense that we do a bunch of the deposition work, which is when we incur the cost of our tools, the metrology and the labor associated with it. And oftentimes, these are -- these can get matched up pretty quickly with the revenue because it's a small number of wafer runs, and that's been true in the past.

But we've been talking now for a couple of calls that we've been working with a very large customer on one of the largest wafer -- on the largest wafer run that we've ever done. And we also have other customers. So now what you're seeing is, we do a lot of that work we don't ship all of those wafers out, but we don't necessarily do all the deposition because the nature of these engagements is it can be iterative.

You may do some wafers for setup, you run a series of tests, the customer validates those, you get some feedback. You then do another run with slightly different conditions, either on the MST or how the customer processes it with implants and things of that nature. So you can get a lot of activity in 1 quarter and then the wafers will ship out over time.

And one of the challenges in sort of giving guidance is, it isn't set in a schedule of we're going to ship 25 wafers this month and 25 wafers 2 months after that. Sometimes it really depends on what the customer learns in the process of evaluating that, setting up a new set of experiments and then we ship out more. So yes, there's multiple customers here, and these are important engagements in different application areas.

Okay. All right. That's helpful, Frank. I'll probably follow up with you a little later on that one. Maybe 2 more questions. I will jump out of line here. First of all, Scott, in your prepared remarks here, and I'm sure we'll review these in detail when the transcript comes out here, but you talked about kind of segmenting your opportunity based on where in the stack your MST is applied here and you talked about on top of the wafer versus somewhere in the middle.

Certainly, layers in the middle or -- I think it's fairly understood, especially for me who is not a device guy per se that that's very complicated. But vice versa, if you can apply just on the top, that seems to be a much simpler process, which also implies it might be an area where by which you might expect to see or hope to see your first license here just from a time-to-market perspective.

So 2 questions for you is, I think I missed the applications areas that, that specifically applied for. And b, would you agree that, that's a very -- a somewhat likely or very likely situation by which you first reach first manufacturing license and commercial production?

Yes. So first of all, yes, you're right about being deposited on top of the wafer makes it much easier. The applications that we specifically spoke about that do that is RF-SOI and gallium nitride; and also in the future, we have some ideas on next-generation DRAM that could use it. So one thing to understand very briefly is when we deposit MST in the bottom layer, it has to be on a process that doesn't use incredibly high heat for long periods of time. So if we deposited -- if it was on an MST starting wafer and then someone put the wafer into an annealing step that was 1,100 degrees for an hour, then that would really damage the MST itself and it wouldn't work.

So the only time we use MST on the starting -- on the start of a wafer is on -- manufacturing processes are going to be lower temperature. And there's a lot of those. Like RF-SOI is running at very low temperatures. The new Gate-All-Around processes, they're trying to run them at very low temperatures. So in theory, MST could be on the base -- on the starting wafer for those.

Gallium nitride, we put MST on bottom before it grows the gallium -- yes, the gallium nitride on top of it. That one isn't quite as low temperature, but it doesn't matter. The MST still works as a starting wafer. So I think a layman might say, well, why don't you just do every process as a starting wafer if it's much easier and faster time to revenue. Well, it has to fit a certain dynamic, which has to do with this temperature range.

You had a second half to your question, and I've talked those [ I might have ] forgotten it.

You hit the applications. I think you've answered most of it. So I think that's very helpful. Last question for me, I'll jump out of line. You talked about this large capital equipment partner. And I think today, you mentioned about going on a roadshow here. Maybe just kind of give us a sense of how broad the engagements are with this company.

I think in the past, you mentioned 2. I don't know if that was the limit or there were more you just didn't mention, but -- well, how do we understand the scope and breadth of your interaction with customers through or with them?

Okay. So the stated aim of our partnership is in the Gate-All-Around market. And that was what we announced in our press release. However, I have to say that -- there's great value in this partner working with us in everything. And there's value in us working with them in everything. So we have talked to them a lot and done some work on DRAM as well. So basically, yes, I would say our primary focus right now is Gate-All-Around and DRAM. And when we go out on the road, that's who we'll be really targeting most closely.

Okay. Thank you, Richard. A number of questions have come in on the Q&A line, and I will aggregate them and ask some of the more common ones.

So first one is about the Gate-All-Around projects and when the -- there's a number of current projects underway that are expected to launch soon. And how many years do you expect the target process you are currently collaborating on to enter production?

Yes. So first of all, working with a few different customers, so there might be a different answer for each customer. In general, the guys working on Gate-All-Around, the great news is it's amazing working with them because they have armies of people working on this stuff, lots and lots of resources to test out your material. And the bad news on that is that they come back with a ton of requests for more information and more testing.

But they're almost always working towards some kind of a launch that you would be built into. Some of them, I would say the majority are looking at a launch that's still a few years out. There is some of them that are actually looking at using MST to improve yield on processes that are in production today.

I can't exactly say, well, if or how long it would take to get into production on those processes. But my guess is if they integrated MST, they would have to do some qualification work on it. But if it did indeed improve their yield, which I think is what the majority of them are looking at for the current timing processes, they would try to move it into production very quickly. As long as it didn't break anything in the specifications of their production wafers, they would have every incentive to get it into production as soon as possible to improve yield.

All right. In the past, you've talked about JDA1 and the fabless RF licensee. Have you been doing wafer runs for those? And what do those results look like?

Yes. So the answer is yes, we are doing wafer runs with them. Unfortunately, we don't have the results yet. I can't really commit that I'll be able to give you results from each customer. But generally, what happens is when the results come out, that's the timing when we'll be able to start driving towards licenses and transitions to production.

Generally speaking, we have a number of different customers with wafers underway right now. None of them are coming out in the next few months. I would say we might have some coming out at the end of the year, but more likely into the first quarter before we start seeing a lot of results from those runs.

Okay. And one for Frank. So the Incize partnership for GaN testing, can you talk about the economics there of who's paying for the runs and -- or for the testing, if you could shed a little light on that?

Yes. I mean at this stage, this is a -- an arrangement with [ RF ] Incize, where we're each bearing our own costs and we'll hopefully achieve a result that would lead us to some further activity. But right now, it's -- we're not paying them to run testing nor are they paying us for wafers. So it's early stage.

And I think our hope right now would be to generate good RF data because that's something notoriously difficult. RF testing is complex. It's not something that we can typically do ourselves. So a lot of the work on RF-SOI that we can do is kind of physical characteristics of our film. But when you get into some of the testing of actual devices on kind of different figures of merit, then those are more specialized tests. And so getting more insight into that is very helpful from a marketing standpoint.

And our view is there was some question on work with Soitec and wafer-based products. The more information that we have to market to the ultimate customers of RF-SOI devices, the better it is in terms of building a relationship with Soitec, who's a wafer manufacturer. So the more end demand that they see, the closer the collaboration is with us. So I kind of see it as a means to an end there.

Okay. And then Scott, going back to a topic we've touched on in the past, but is there an update on JDA2?

JDA2 is running wafers with us. And they're one of the ones that I talked about that we'd hope to get some results at the beginning of the year; and hopefully, see if we can turn that into a license and then plan to go to production.

Okay. And then with regard to the STM news, we had a number of questions on disclosure channel. And can you talk about why you chose to put the news out on a blog post?

Yes. Yes. And we went back and forth on that. So I just want to be clear, we were in discussions with ST all through August, September and into October about implementing this new version -- a new architecture we had and moving forward on 300-millimeter, and we were waiting to find out from them what the plan was, when that work would start, when they had planned that it would be trying to take it to production. And it was really just 1.5 weeks ago that we had a call with them, and that's when they told us that they did not have a plan in place to use MST to do that new architecture.

So immediately after that call, we got off the phone and we started talking about, okay, we have an earnings call in 1.5 weeks. but it seems too long to wait for 1.5 weeks before we notify investors. And so on the following Monday, we actually started speaking with ST to make sure that when we disclose this, we would be following their internal guidelines on what we could say and couldn't say. And then on Tuesday, we put out the blog post.

We could have put out a press release, but press releases tend to be, at least in our opinion, much more black and white about news that you're giving. In this case, we see it as a much more nuanced message. ST was telling us we're not -- we don't have a plan to use you guys on this next run. Yes, very bad news because I know all the investors want to know when the royalties will start flowing, and so do we. But they didn't say they'll never use us. And they also reassured us again and again that they are continuing work using our technology on other process areas.

So we felt that using a blog would allow us to give a little more nuance than a press release. And we know that the channels of communication that we have with the blog, we push it immediately out to all of our investors, so -- that are at least registered with us. And so we felt it was a good channel of communication in this particular case. And the most important thing to us was to get it out there as soon as we can within the restrictions of making sure we were working everything out with ST and so forth.

All right. And one more question here. Is there any chance of government funding now that Atomera has been working with Sandia for a while?

I talked a little bit on this call, which I've never done much about in the past about all of the different R&D efforts that we have underway. And many of them are, as I mentioned, through Academia, through outside commercial partners so that we don't have to burden our internal team with too much of it. But Sandia is very interested in many of those technologies, and they have government programs that are interested in implementing things that would use those. So yes, there's a lot of interest through Sandia.

And we also continue to work with the government and with the CHIPS Act infrastructure such as it is to see what we can do to kind of deliver some of our technology in through that channel and get some near-term revenue that way as well.

Okay. Thank you, Scott. At this time, we'll turn the call to Scott for closing comments.

Okay. Thanks, Mike. Okay. Yes, thanks for joining us and listening to our progress that we've been making here at Atomera. Next month, we'll be attending the Craig-Hallum Alpha Select Conference in New York, and we look forward to seeing some of you there, if you'll also be attending. Please continue to look for our news articles and blog posts, which are available along with investor alerts on our website, atomera.com.

Should you have additional questions, please contact Mike Bishop, who will be happy to follow up. Thanks again for your support, and we look forward to our next update call.

Thank you. This concludes the conference call.

Hello, everyone, and welcome to Atomera's Second Quarter 2025 Update Call. I'd like to remind everyone that this call and webinar are being recorded, and a replay will be available on Atomera's IR website for 1 year. I'm Mike Bishop with the company's Investor Relations.

As in prior quarters, we are using Zoom, and we will follow a similar presentation format with participants in listen. We will open with prepared remarks from Scott Bibaud, Atomera's President and CEO; and Francis Laurencio, Atomera's CFO. Then we will open the call to questions. If you are joining by telephone, you may follow a slide presentation to accompany our remarks on the Events and Presentations section of our Investor Relations page on our website.

Before we begin, I would like to remind everyone that during today's call, we will make forward-looking statements. These forward statements, whether in prepared remarks or during the Q&A session, are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 10-K filed with the SEC on March 4, 2025.

Except as otherwise required by federal securities laws, Atomera disclaims any obligation to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions and circumstances.

Also, please note that during this call, we will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is posted on our website

Now I would like to turn the call over to our President and CEO, Scott Bibaud. Go ahead, Scott.

Thanks, Mike. Right now, there are a number of macro factors in the semiconductor industry that are in favor of our product initiatives. For this reason, wafer activity at Atomera and customers is currently running at a much higher level than we typically experience, which reflects the number of irons Atomera has in the fire. On today's call, I'd like to give you a flavor of our activity and how new applications of MSC are driving our business.

Let me start with a review of our work with licensees. A few months ago, STMicro announced a new initiative to reshape their manufacturing footprint to 300-millimeter silicon production. It was not entirely clear to us how this would affect the Smart Power segment, Originally, the first BCD 110 process with MST was to launch using 200-millimeter wafers and later, the process would be ported to 300-millimeter. We just heard recently as part of the reshaping initiative that ST has changed plans and decided to go directly to 300-millimeter, which will delay the rollout of BCD 110 with MST. We do not have a revised schedule, but it's now clear that we will not enter process qualification in 2025.

While the delay is disappointing, ST's ambitions for advanced BCD are definitely very aggressive, targeting a significantly higher 300-millimeter wafer capacity at full build-out than we initially expected. We are very excited by the revenue potential represented by those numbers. The move to 300-millimeter wafers is logical since they are fundamentally less expensive than 200-millimeter, which hopefully should assist adoption.

As mentioned on our last call, ST has continued to support the adoption of MST in multiple other applications with more BUs expressing new interest this past quarter as well. We've reached a new high watermark on customer wafer runs at both our facility and our customers' fabs. Many of our licensees are in the process of doing demo runs with us that we hope would lead to production decisions. And during the last quarter, we were able to deliver to them new insights into incremental improvements they can get with MST.

Let me provide a few updates on some important customers. At JDA1, meetings with a new senior level management team in conjunction with support from our capital equipment partner makes us believe that the wafers we are working on for them will drive a decision to use MST in a new application. Both JDA2 and our fabless licensee are in the process of doing wafer runs with us. We believe these will be critical in reaching a production decision once they've been able to test the final devices.

At our foundry licensee, we are currently in a TCAD exercise to define our next steps as well. Two calls ago, I spoke about a couple of new potentially transformative customers we had started working with. Each of these customers is now running wafers with MST, one in a large-scale demo plan encompassing 2 business units and the other engaged on multiple wafer runs to test out different MST applications. Several other customers are in various stages of investigating MST for their products as well. As I said at the beginning of the call, our team is very busy right now, and this is a real positive for our future business.

A substantial part of our activity is targeting the advanced gate-all-around and DRAM areas where our source strain diffusion blocking capabilities are particularly interesting, but by no means the only solution we are offering. In these new nodes, everyone is focused on yields and MST is a tool that can help improve yields.

In the power area, our ability to simulate different architectures and integration techniques using TCAD and our own internally developed AI tools has allowed us to propose solutions to customers, which we do not believe are possible to implement without MST and have led to potential breakthrough levels of performance. Our work with Sandia and other partners on gallium nitride is making great progress. This past quarter, we've come to understand even better how MST can benefit GaN devices, causing us to expand our focus from exclusively GaN for power to also include GaN for RF.

To accelerate this work during the last quarter, we announced a strategic collaboration with Insize, a well-recognized and respected RF test house. They will help us characterize this technology in terms that the market will appreciate, making it easier for designers to translate our process changes to RF electrical spec improvements. We believe RF will be an important growth area for GaN in the future, and several potential customers have already stepped forward expressing an interest in our work.

Finally, in RF SOI, we have expanded our offerings to also include the key devices for low-noise amplifiers or LNAs. I'd like to take a few minutes to give some background on why this LNA offering is so important. Historically, we've worked with RF SOI customers primarily on RF power switches. Last year, many of those customers started asking if we could help improve LNAs in their mobile phone front-end products. LNAs are the technology used by cellular phones to receive and amplify small signals. There are a number of reasons why LNAs need further improvement at this time.

Carrier aggregation was introduced in LTE Advanced to increase peak data rates and network capacity by combining multiple spectrum chunks or component carriers into a single data channel. Manufacturers have been aggregating up to 4 carriers. But in the future, we expect to see 6 carriers, which means that more LNAs must be turned on to receive these signals, significantly increasing power consumption. New frequency bands associated with the evolution of 5G and 6G cellular are also driving the need for more active LNAs. The net result is that to bring features that customers are demanding for new phones to market, a solution to lower LNA power consumption must be found.

That's where MST comes in. We took existing MST RFSOI transistor silicon test data and then use TCAD to reoptimize implants for the LNA devices. We determined that MST can significantly improve the performance of LNAs by lowering the circuit bias current and hence, the power consumption. We believe based on market reaction, we have started promoting this capability just at the right time. Recently, we presented our findings at an RF technical conference and has generated lots of inbound interest. Indeed, during the last few months, we've worked with several different RF SOI manufacturers to start new wafer runs using our partner, Soitec special ultrathin RF SOI wafers to prove out those LNA benefits. We'll be working hard to shore up this evidence with more data to entice customers to take it to market quickly.

What is particularly exciting is that we can provide this LNA benefit in addition to the power switch benefit on RF front ends with a single deposition of MST on a wafer. So our customer can get 2 much needed solutions for the cost of , which should make it even more attractive. We expect that this type of high visibility solution with end customer pull should go to market more quickly than a general performance improvement. I'm always impressed by the amazingly high levels of creativity and innovation demonstrated by Atomera employees across many diverse fields. And today, I've spoken about some of the solutions we found for industry problems. You can also measure this innovation by the number of patents we file and have approved.

This past quarter, our tally of issued and pending patents exceeded 400, which is quite a milestone for a company of our size. We are definitely punching above our weight. In the last month, we also joined the National Semiconductor Technology Center, which has a goal of extending U.S. leadership in semiconductor technology. There, we expect to provide important contributions but also benefit from the NSTC focus on reducing the time and cost to prototype new semiconductor technologies like the ones Atomera is bringing to market. We believe this organization will help create the ecosystem necessary to continue the advancement of Moore's Law.

Finally, I'll just reiterate how many active engagements we have underway at Atomera and how we feel in the brink of several of them turning into commercial agreements. Team is working hard. Indeed, we are looking to hire several additional team members, but morale is high, and we're excited to see our innovations getting into production. When that happens, we continue to believe that Atomera will see increased adoption rates and shorter time to market as competitors race to catch up with those who are already using MST to get market advantage. We are working hard to make that day come as soon as possible.

Now Frank will review our financials.

Thank you, Scott. At the close of the market today, we issued a press release announcing our results for the second quarter of 2025. Our summary financials are shown on this slide. Our GAAP net loss for the second quarter of 2025 was $5 million or $0.17 per share compared to a net loss of $4.4 million in Q2 of last year, which was $0.16 per share. GAAP operating expenses in the second quarter of this year were $5.2 million, which was an increase of $565,000 from $4.6 million in Q2 2024.

The increase in OpEx was due to a $415,000 increase in R&D expenses, reflecting both higher outsourced device fabrication work and increased payroll costs and a $215,000 increase in G&A expense, primarily due to higher payroll costs. These were partly offset by a decline in sales and marketing expense due to lower headcount.

Non-GAAP net loss in Q2 2025 was $4 million compared to a loss of $3.6 million in Q2 of last year due to a $275,000 increase in non-GAAP OpEx, reflecting the same factors I just discussed. Stock compensation expense, which is the main difference between GAAP and non-GAAP operating expenses was $1.3 million in Q2 2025 and $1 million in Q2 2024. Sequentially, Q2 2025 non-GAAP net loss of $4 million compares to a $4.4 million loss in Q1, primarily due to payroll -- lower payroll expenses, reflecting lower headcount in sales and marketing as well as 401(k) timing issues.

Our balance of cash and cash equivalents as of June 30, 2025, was $22 million compared to $24.1 million as of March 31. We used $3.5 million of cash in operating activities during Q2 compared to $4.8 million in the first quarter. The first quarter of every year has higher cash outlays for items that are expensed throughout the year.

During Q2, we raised approximately $800,000 under our ATM facility, net of commissions and expenses of filing our shelf registration by selling approximately 185,000 shares at an average price of $5.21. Since the end of the quarter, we've raised an additional $2 million from sales of approximately 392,000 shares at an average price of $5.23, putting our current cash balance higher than at the end of Q2, which will allow us to be selective in accessing the market going forward.

For Q3, we expect to recognize a small amount of NRE revenue from wafer shipments to our fabless licensee and to the customer running a large-scale demo that Scott mentioned in his remarks. Timing of that revenue will depend on when wafers are shipped out to those customers. Given ST's shift to rolling out BCD110 only on 300-millimeter wafers, we do not expect that milestone payments for process qualification will happen until next year.

Moving to expenses. On our last call, I narrowed our expected range of non-GAAP OpEx for 2025 to a range of $17.25 million to $17.75 million. I'm maintaining that guidance, though we are tracking to the low end of the range. We've spread our outsourced fabrication work over multiple vendors to enable us to address the range of technology areas we're working on. And this spending should trend back to our prior spending levels with TSI Semiconductor. We're also making solid progress in adding new leadership in sales and marketing and bolstering our engineering staff to support our unprecedented level of customer activity.

With that, we'll turn the call back over to Scott for a few summary remarks before we turn the -- we open the call up for questions. Scott?

Thanks, Frank. Today, Atomera is offering the market several innovative solutions to problems that are difficult to solve without MST. I believe we are better positioned than ever to enable new capabilities for today's challenging electronic devices. With the amount of engagements we have today with top semiconductor manufacturers, it's only a matter of time before that effort turns into the commercial success that will make Atomera a semiconductor technology licensing powerhouse. I appreciate your support as we work hard to turn this vision into a reality.

Mike, we can now take questions.

Thank you, Scott. [Operator Instructions] And right now, our first question comes from Richard Shannon of Craig-Hallum.

Great. Thanks, Mark, and thanks, Scott and Frank, for let me ask a few questions here. I guess I'll ask the first one on STMicro. Certainly, a disappointment to see this delay, but obviously, a need for STMicro here. I guess my first question is, to what degree is the work that you've done with them on 200-millimeter will be useful and be leveraged to 300-millimeter? Or to what degree do we have to kind of restart things? Frank, in his comments said something about not expecting a milestone payment this year, but next year. So it doesn't sound like it's necessarily 2 years, initial 2 years, but maybe you can characterize that somehow, please.

Yes. I think it's important to know that when we started working with STMicro, they had to learn a lot of things. They had to learn how to deposit MST using EPI and get that working really well and looking very good. And then the manufacturability efforts they've been going through and trying to figure out how to deposit it at faster speeds so that they can have higher throughput in production. All of that work is useful for going to 300-millimeter as well. So at this point, STMicro is an expert on depositing MST, analyzing the results, figuring out how to optimize throughput with that, manufacturability in general, I should say.

On the other side, there's the integration work that has to happen with MST. That's also work that kind of started fresh at the beginning of the contract, and we've done a number of different wafer iterations with them where they've simulated the MST and then run it and got the electrical results. And at this point, they're quite good at that as well. So I don't think it's all -- I mean, I should say, I think they have got a lot of learnings under their belt that will help them move to 300-millimeter relatively quickly and painlessly. Now there are some impediments to moving to 300-millimeter. They have to get -- they have to put MST on a 300-millimeter tool. In the past, they've had it installed on 200-millimeter tools.

And so they have to obtain that, get it done and then tune that up and then be ready to start making wafers with it. And then there -- I'm sure they're making other changes to the VCD110 technology when they're moving to 300-millimeter, and there'll be some integration changes that have to happen, but nothing close to the amount that they're having to do when they started from scratch at the beginning. So yes, I'm hopeful that we can move pretty quickly.

Okay. But just to be clear, Frank's comments were about expecting the milestone payment next year. That sounds like a fairly high level of confidence in that statement. Is that accurate?

Well, I feel -- I mean, what I can tell you is that we have shown ST some performance levels that I think are -- would be very, very compelling for them to take to production next year in the 300. And so I think they're going to move as fast as they can to make that happen. And yes, I think it will Yes. I hesitate to make any kind of a statement about when they will get into process qualification because I'm restricted on that.

But I don't -- if they can get access to the 300-millimeter tool -- and by the way, we have 300-millimeter tools, and we've offered to them already that we can do the work of depositing on wafers until they have it ready. And if they can do all that quickly, then I think, yes, we have a chance of doing that relatively quickly.

Okay. Fair enough. Maybe another question related to STMicro, which is, as we have sort of expected in the years we've been covering you, getting to that first licensee who's committed to do it and perfecting it and taking production is obviously the really hard move here. And a lot of companies are risk averse and we'd rather see somebody else do that first.

To what degree have you had conversations in the 2 years since you announced this partnership with STMicro and move pretty -- what seemed like a pretty far down the road here with them so far. Have you had other conversations with potential engagements saying, as soon as you get that done with STMicro, we're willing to go forward.

Yes. I think people don't say it quite as explicitly as that, Richard, but they say things that are similar to that all the time. And it's definitely true that since we started working with STM, people can see we're getting very close to the end. We've had others that have kind of joined in and said, yes, okay, we got to do this as well. So you're talking about kind of the domino effect that I've been talking about for a long time. Once we get with one guy, we'll get with others. And we've seen real evidence of that in the past, yes.

Okay. Fair enough. Scott, I would love for you to maybe restate and describe a little bit more about this dynamic with one of the transformative customers. I didn't catch the language you mentioned about 2 -- where did I put it here, 2 large-scale demos with 2 different business units and different applications. Maybe you can explain or restate that and explain a little bit more about what's going on.

Yes. So we I think in the call in February, I mentioned that we had 2 new customers who had put in the category of transformative. If they can get to production with us, it will be a very, very significant event. So one of them is doing a very large demo run, the biggest we've ever done, meaning more wafers, more different splits and things that they're trying to test out. And that's fantastic. If they're doing a lot of wafers, what that means is they can get a lot of cycles of learning. So you take a certain subset of those wafers and you run some tests. And even maybe before you get -- you may not even have to wait until those wafers come out at the end before you start running new tests.

So if you have a big pile of wafers at your disposal, you can keep doing those and get more and more cycles of learning in a shorter period of time. And so that's what they're planning to do. So we're excited about that. And they're also doing the same type of thing with 2 different business units at the same time. So yes, both very exciting.

Okay. When do you expect I don't know, some sort of conclusion about how successful these runs have been. Maybe we'll hear in the next call or just take a little bit longer. I know some of these.

I think it will take longer than the next call. We're in the -- we're doing the runs right now. We probably -- I think maybe we might see first results if everything goes really well by the end of the year. And then these things are frequently iterative. So we don't know if they'll get those first results say, okay, we got to do another one because we need to try something different. But yes, I'm hopeful that they'll get something relatively quickly. And we've done -- it's not like we're just starting from fresh either. We've been working with these guys for some time on the TCAD level. And so they've got simulations, and we think we're guiding them in a path that will make them successful pretty quickly.

Yes, the other transformative customer you asked about also with them, they also are -- they're working on multiple wafer runs in multiple different application areas. So definitely different than the first. It's an entirely different area that they're in. And we've proposed a number of things they could do with MST, and so they're trying out a few of them. And so that's pretty exciting as well, and we're giving them a lot of support.

Okay. Sounds great. We look forward to more updates there. Scott, let me ask about something I think we talked on the last call about this unnamed equipment vendor partner that you've been working with. And I think specifically you mentioned, I think it's related to JDA1, where they have been helping you there. Maybe just talk a little bit more broadly about what kind of engagements you've been working on with them. And I'm not sure if -- I don't think I asked this last quarter of you, but what kind of application areas are we talking about here? Is this leading edge, wireless or RF or just any way you can characterize where they're focused with you?

Okay. So a number of questions there, which I'll be happy to dive into. So first of all, the applications areas. We announced a strategic partnership with them for gate-all-around devices. And so that's where ostensibly, the focus was supposed to be. But now that we're getting deeply involved with them, it's natural that we're kind of expanding into other areas because once you start talking to some about trying to work on a customer and you need help, you can pull them in to help you in a number of different ways. So -- but the strategic collaboration is around gate-all-around, okay?

So I think the first part of your question was how is that going? Is that right?

Yes, yes. And maybe describe the breadth of the engagements in anyway.

Yes. So shortly after our announcement, we started having management level meetings with them to talk about exactly how do we want to try to focus on addressing this segment. We've done a lot of work in that area. So it isn't like we're starting from ground zero. As a matter of fact, we've done some work with them. They've also done a lot of work. And so we defined a number of different areas where we're going to work together to develop the test data that's necessary to really convince customers to use this and to take it to production. And we're doing a lot of work with them since then. As a matter of fact, we have weekly meetings and constant updates to what we're working on and how the progress there is going.

Separately, we're also talking with their executive management about kind of customer relationship type of engagements, like who do we need to talk to at what customers, how can we jointly go in there and offer a better solution together than we could separately. And so those discussions are underway. We've had a few meetings with customers. I hope to have a lot more as we come out of the kind of summer slow season.

Okay. Fair enough. Let me ask one question to Frank, and I'll jump out of line here. Frank, I think you mentioned for your OpEx guidance for the year, keeping the same, but kind of angling towards the low end here, yet you're talking about a number of hires here. Maybe, a, can you kind of describe some of the needs here from an OpEx point of view, especially on the, I guess, more on the engineering side, what do you need there? And then does this extrapolate into a noticeable or meaningful growth as we look into calendar '26?

Yes. I think that the reason I'm kind of keeping the guidance where it was, but also talking about new hires is really just on the timing we're into the second half of the year. Obviously, when our VP of Marketing left, that wasn't anticipated, and we had planned on adding an additional headcount in sales and marketing. So now we're sort of still doing that and backfilling that person who left. And so those are 2 hires that were kind of planned from the beginning, and now we've sort of spent less in the first part of the year, and we'll kind of trend back to that.

In engineering, we're -- this is just consistent with the amount of customer activity that we have. Some of the folks that are supporting our customers I think particularly in the advanced nodes and DRAM are -- the teams are a little bit lacking in depth on the bench. And so we just -- we're kind of overwhelmed with the work that we need to do, and so we need to add there.

But I wouldn't read into that to say that we're going to -- you can draw a line there and that we'd continue to grow in years going forward. I think this is really just catching up to the demand. And on the sales and marketing side, we're really backfilling on positions that we used to have full if you sort of turn the clock back a year ago.

And some questions coming in on the Q&A chat here, Scott and Frank. The first one is, do you anticipate other existing customers moving on from current 200 work and instead focusing on 300 millimeter?

Yes. I don't -- I wouldn't say it's necessarily an industry-wide trend. It's not a bad trend for us. I think the setback with ST is primarily because we had initially started doing work in 200 and are going to transition to 300. But for -- I would say for the majority of our customers today, we start working on 300 from the beginning. Our technology works perfectly fine in both of them. So -- and yes, I would say the threat that some of our others move from 200 to 300 is relatively low.

And you mentioned to Richard a little bit about the porting of MST to 300 millimeters at ST. Is that a heavy lift to move? Or can you talk a little bit more about -- or expand on what you said to Richard about moving?

Yes. I don't think -- so as I always explain to Richard, there's 2 pieces to the move. One piece is changing -- is moving the EPI side, which I really don't think is a heavy lift from an engineering perspective. Now the challenge there is that you need to have a tool that you can convert over to run MST. And so for some people who don't have a tool that can be an impediment, I'm not going to comment on ST's capability, but they're a very big company with lots of resources. And so if they could get a 300-millimeter tool, they could convert it over very quickly to be able to run MST and their epi engineers are already fully trained.

On the other side, the integration, again, I don't think it's a heavy lift. They understand MST. They know how it works. They know how to integrate it into their devices. The only question there is whether they're planning some other changes to 300-millimeter that we need to make some change to MST to react to. I'm not sure what's happening there. This is kind of all new and new information, and we will -- but I don't -- on balance, I would say these guys understand what they need to do -- and there's no major impediments.

Great. And can you provide -- and you touched on this a little bit with Richard, but can you provide an update on the collaboration with the equipment partner that was announced last quarter? And are you seeing synergies from the partnerships and specifically in gate-all-around?

Yes. I mean we're already getting some benefit from -- so first thing that we did with this partner after the announcement was to get together and start thinking about what customers do we want to go after and what are the key applications that need that the customers are looking for and how can MST help in those? We did identify a prioritized list of application areas that we wanted to address, some of which, I would say, the most important ones we are already working on, but then there are some others they raised that we hadn't really started too much work on. The good news is we immediately set out to create an engineering plan where we would do the testing and process development to be able to test those things out and give the data to the customer so we can win the customer.

So I think that's been something we've already done quite a bit of work on, and we'll continue to -- that's going to be the long-term trend of how a partnership works here. And on the other side, we need to do more on the business side. I think the business side is lagging a little bit the technical development, which is natural because we need to have the kind of the data to do a marketing pitch to a customer, and we're working on that together. But I think very soon, we'll start to do a lot more at the kind of senior level customer relationship.

Great. And given the explosive demand for data centers, what's the market around or the market demand for MST-SPX? And what are Atomera's plans to capitalize on the trend?

Yes. I mean everything we're doing in power, which is MST-SPX and gallium nitride -- all the gallium nitride power work we're doing is definitely well targeted at the data center. And both of those technologies will help to seriously reduce power consumption, make our customers' power products much more efficient, and we think that's a big opportunity.

We also -- I may have mentioned this on an earlier phone call, but we have we have some early-stage work on 48-volt power devices, which is what the new AI data centers are moving to as the standard for the rack power supply voltage, and we think we might be able to provide some real benefits to the trench that are used to make those type of devices. And so we're talking to a number of customers about that now as well.

Great. Thank you. And here's another question that's -- they'd like an update on the progress of contract discussions with memory customers for DRAM and high-bandwidth memory. And any recent patents seem to suggest you're proposing a new memory architecture, interconnect architecture. So he asked if he's curious if this is part of a process to create new IP for memory device structures beyond MST.

So first part of the question about the contract. So we won't comment on contract discussions until we actually have a contract close. So I'll probably pass on that part of the question. But the second part, yes, we're constantly looking at important market needs and then trying to figure out how to create IP to take advantage of those needs. So if we figure out a customer has some demand and MST can help to support that.

The first thing we do internally is we do some development efforts and try to come up with a solution and then we patent that solution, and then we bring it out to the market and start pitching it to customers. And so if you really go in and analyze our data, you can see some of the ways that we've looked at different markets. In this case, you're asking about the memory market. We have been offering solutions in the memory market for Sense amps for several years. We also have some of the same technologies that are advantageous for gate-all-around. We will also be advantageous for some of the newest DRAM nodes that are coming out.

We also have some technology around new architectures that are either enabled by MST or are just great ideas in general that we may have patented. And all of those are things that we'll be out marketing to the customers in the future.

I don't know if you want to add anything to that, Frank, but...

No, no, I think that you've covered it. I mean the new -- there are a number of recent patents, both on specifically MST-enabled solutions for DRAM that we've been talking to customers about for a while. And there are a set of new technologies that we are -- that we have patented. And those do offer potential other revenue streams in the future beyond just sort of the MST film, but that's very early days.

And it's important in those kinds of technologies to get the patents completely filed and issued before we'd be ready to talk to customers because in our business model, what's the real kind of core IP for us is the MST film. But when we start getting out into other kind of architectural type patents, you really need to have those completely filed and issued before you talk to customers. So the person asking the question is right to sort of focus on the patents. I think that's important, but that's more of a future activity.

Okay. Another question. Does becoming an official member of the NSTC increase the possibility of receiving CHIPS Act subsidies?

I think the answer is yes, but one of the primary reasons for it is not necessarily the CHIPS Act directly in terms of getting direct funding on it. One of the issues that you face in our business is when we had TSI Semiconductor, it was great because we could run a lot of test chips, but it was on a very old technology, 180 nanometers. Now that we see that we're working with a lot more kind of advanced transistor structures, gate-all-around, DRAM, et cetera, one of the biggest challenges that we have is finding places where we can affordably test MST on those kinds of structures. And historically, there have been very few labs and access to them is extremely expensive.

With NSTC and particularly in the current phase of the CHIPS Act, which is more around R&D and prototyping of new materials and new devices, our hope is that we will get access to more testing and metrology that's required to test MST on those kind of structures. That being said, it also puts you much more in the conversation of where -- it does give you a look at where there are funding opportunities coming up that we could apply for.

So I do think it increases the chances of getting CHIPS Act subsidy. But I think indirectly, the ability to get access to prototyping and those kinds of services is almost more important.

All right. Well, thanks, Frank. Scott, at this point, we'll turn the call back to you for closing comments.

All right. Well, thanks, Mike, and thank you all for joining us to hear the progress being made at Atomera. Please continue to look for our news, articles and blog posts, which are available along with investor alerts on our website, atomera.com. Should you have additional questions, please contact Mike Bishop, who'll be happy to follow up. Thanks again for your support, and we look forward to our next update call.

Thank you. This concludes the Atomera conference call.