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What changed in Atomera Inc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Atomera Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+177 added−182 removedSource: 10-K (2026-02-24) vs 10-K (2024-12-31)

Top changes in Atomera Inc's 2025 10-K

177 paragraphs added · 182 removed · 131 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

54 edited+27 added−19 removed52 unchanged
Biggest changeAs of the date of this Annual Report, we are actively engaged with this second JDA customer and planning additional development and integration work that, if successful we believe would be a significant step toward commercialization. 7 We have also entered into integration license agreements with (i) a leading fabless RF semiconductor provider, (ii) a semiconductor foundry and (iii) Asahi Kasei Microdevices, or AKM, which is an IDM and fabless vendor.
Biggest changeWe have also entered into integration license agreements with (i) a leading fabless RF semiconductor provider, (ii) a semiconductor foundry and (iii) Asahi Kasei Microdevices, or AKM, which is an IDM and fabless vendor. Under these integration license agreements, customers have paid us for the right to evaluate MST technology, which is integrated onto their semiconductor wafers.
We believe that the MST-SP and MST-SPX devices will have immediate application in power management integrated circuits (or PMICs) which are pervasive in hand-held, battery-powered devices and elsewhere. The higher voltage MST-SPX devices are applicable to the rapidly growing automotive and data center power sectors.
We believe that MST-SP and MST-SPX devices will have immediate application in power management integrated circuits (or PMICs) which are pervasive in hand-held, battery-powered devices and elsewhere. The higher voltage MST-SPX devices are applicable to the rapidly growing automotive and data center power sectors.
Prior to enabling a customer to install and use MST technology on epitaxial deposition machines in their own fab, we require execution of an R&D license which grants rights limited to manufacturing MST-enabled products for internal R&D and qualification but does not give the customer the right to distribute or sell products that use MST.
Prior to enabling a customer to install and use MST technology on epitaxial deposition machines in their own fab, we require execution of an R&D license which grants rights limited to manufacturing MST-enabled products for internal qualification but does not give the customer the right to distribute or sell products that use MST.
The customer will conduct additional testing to ensure that the new products developed with the new PDK achieve manufacturing reliability under accelerated test conditions that simulate volume production. Upon successful completion of the qualification phase and execution of a high volume manufacturing (HVM) license with Atomera, products can be built and shipped using this manufacturing process. 6. Production .
The customer will conduct additional testing to ensure that products developed with the new PDK achieve manufacturing reliability under accelerated test conditions that simulate volume production. Upon successful completion of the qualification phase and execution of a high-volume manufacturing (HVM) license with Atomera, products can be built and shipped using this manufacturing process. 6. Production .
There can be no assurance that our MST technology will deliver the performance, power, cost reduction or other requirements our customers seek for their products or that the integration of our technology with our customers’ manufacturing process will be successful in high volume.
There can be no assurance that MST will deliver the performance, power, cost reduction or other requirements our customers seek for their products or that the integration of our technology with our customers’ manufacturing process will be successful in high volume.
Currently, materials such as GaN suffer from a tradeoff between high-cost specialized wafers and defective, low-yielding wafers resulting from the crystal mismatch between heterogeneous materials. We believe MST can offer a cost-effective solution to these tradeoffs by serving as a buffer layer between different materials, such as GaN and a silicon wafer substrate.
Currently, materials such as GaN suffer from a tradeoff between high-cost specialized wafers and defective, low-yielding wafers resulting from the crystal lattice mismatch between heterogeneous materials. We believe MST can offer a cost-effective solution to these tradeoffs by serving as a buffer layer between different materials, such as between GaN and a silicon wafer substrate.
Engineering Planning: In this phase we engage in a technical exchange of information under a non-disclosure agreement to understand the customer’s manufacturing process and to determine how best to integrate the deposition of MST film onto the customer’s semiconductor wafers. 2.
Engineering Planning: In this phase we engage in a technical exchange of information under a non-disclosure agreement to understand the customer’s manufacturing process and to determine how best to integrate the deposition of MST film onto the customer’s semiconductor wafers. 6 2.
After installation of MST into the fab, the customer will continue development work to perfect the integration of MST technology into their transistor manufacturing process flow. Upon completion the customer will typically release a new Process Design Kit (PDK) which incorporates MST. Circuit designers will use the new PDK when developing new microchips for production. 5. Technology qualification .
After installation of MST into their fab, the customer will continue development work to perfect the integration of MST technology into their transistor manufacturing process flow. After integration, the customer will typically release a new Process Design Kit (PDK) which incorporates MST. Circuit designers will use the new PDK when developing new microchips for production. 5. Technology qualification .
The SEC also maintains an internet site that contains reports and other information regarding our filings at www.sec.gov. 9
The SEC also maintains an internet site that contains reports and other information regarding our filings at www.sec.gov.
In addition, patents may not issue from any of our current or future applications. We also hold registered trademarks in the United States for the marks “Atomera,” “MST” and “MSTcad” and in China for the mark “Mears”. Employees and Human Capital Management As of the date of this Annual Report, we employ 20 people on a full-time basis.
In addition, patents may not issue from any of our current or future applications. We also hold registered trademarks in the United States for the marks “Atomera,” “MST” and “MSTcad” and in China for the mark “Mears”. 9 Employees and Human Capital Management As of the date of this Annual Report, we employ 21 people on a full-time basis.
Our customers and partners include: · foundries, which manufacture integrated circuits on behalf of fabless manufacturers; · integrated device manufacturers, or IDMs, which are the fully-integrated designers and manufacturers of integrated circuits; · fabless semiconductor manufacturers, which are designers of integrated circuits that outsource the manufacturing of their chips to foundries; · original equipment manufacturers, or OEMs, that manufacture the epitaxial, or epi, machines used to deposit semiconductor layers, such as the MST film, onto silicon wafers; and · electronic design automation companies, which make tools used throughout the industry to simulate performance of semiconductor products using different materials, design structures and process technologies.
Our customers and partners include: · foundries, which manufacture integrated circuits on behalf of fabless manufacturers; · integrated device manufacturers, or IDMs, which are the fully-integrated designers and manufacturers of integrated circuits; · fabless semiconductor manufacturers, which are designers of integrated circuits that outsource the manufacturing of their chips to foundries; · manufacturers of semiconductor wafers, which provide the substrates upon which integrated circuits are fabricated; · original equipment manufacturers, or OEMs, that manufacture the epitaxial, or epi, machines used to deposit semiconductor layers, such as the MST film, onto silicon wafers; and · electronic design automation companies, which make tools used throughout the industry to simulate performance of semiconductor products using different materials, design structures and process technologies.
We believe that MST will provide a lower cost of production due to our technology’s potential to reduce die size while leveraging existing manufacturing tools, thereby providing chip makers with increased performance at all process nodes with significantly fewer disruptions to manufacturing processes and less incremental cost than other advanced technologies.
We believe that MST will provide a lower cost of production due to our technology’s potential to reduce die size and/or improve yield while leveraging existing manufacturing tools, thereby providing chip makers with increased performance at all process nodes with significantly fewer disruptions to manufacturing processes and less incremental cost than other advanced technologies.
Depending on our customer’s business model and the negotiated terms of our license agreements with each customer, those royalties may be calculated on the basis of wafers or products manufactured and sold that incorporate MST.
Depending on each customer’s business model and the negotiated terms of our license agreements, those royalties may be calculated on the basis of wafers or products manufactured and sold that incorporate MST.
During 2024, we began applying our technology to wafers used for fabrication of “compound semiconductors” which are devices built using materials other than silicon, such as gallium nitride (GaN), which have properties especially attractive to the power and radio frequency markets.
Starting in 2024, we began applying our technology to wafers used for fabrication of “compound semiconductors” which are devices built using materials other than silicon, such as gallium nitride (GaN), which have properties especially attractive to the power and radio frequency markets.
We offer MST-SP (between 3-5 volts) and MST-SPX (up to 48V), which are types of MST-enabled power devices that offer what we believe to be industry-leading on-resistance (also referred to as Rsp) at comparable or improved breakdown voltage and reliability metrics, enabling reduced footprint (and thus smaller devices).
We offer MST-SP (between 3-5 volts) and MST-SPX (up to 48V), which are types of MST-enabled power devices that offer what we believe to be industry-leading on-resistance at comparable or improved breakdown voltage and reliability metrics, enabling reduced footprint and thus smaller devices.
We are not aware of another technology being offered in the market which provides the same technical benefits as MST. Nevertheless, in some cases the engineering teams in our customers, who are developing their own process improvements, may view MST as competition to their internally-developed solutions.
We are not aware of another technology being offered in the market which provides the same technical benefits as MST. Nevertheless, in some cases the engineering teams in our customers, who are developing their own process improvements, may view MST as competitive with their internally-developed solutions.
The extent of MST-enabled enhancement depends on the device technology and application. We believe that MST compares favorably to other alternatives for enhancing performance of CMOS-type transistors and is both compatible with technologies such as strained silicon and HKMG.
The extent of MST-enabled enhancement depends on the device technology and application. We believe that MST compares favorably to other alternatives for enhancing performance of CMOS-type transistors and is compatible with technologies currently in use such as strained silicon and HKMG.
In addition, since MST is an additive and low-cost technology, we believe it can be deployed on an industrial scale, with machines commonly used in semiconductor manufacturing. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits. We do not design or manufacture integrated circuits directly.
In addition, since MST is an additive and low-cost technology, we believe it can be deployed on an industrial scale, with machines commonly used in semiconductor manufacturing. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits.
We market our MST technology directly to the semiconductor industry through our significant industry contacts and relationships. We also sponsor academic research and participate in industry conferences and associations. In certain foreign jurisdictions, we engage sales representatives to assist us in establishing relationships with local customers.
We market our MST technology directly to the semiconductor industry through our significant industry contacts and relationships. We also sponsor academic research and participate in industry conferences and associations. In certain foreign jurisdictions, we engage sales representatives to assist us in establishing relationships with local customers. 7 Customers We have two JDAs in place.
We believe these capabilities are helping us focus integration efforts for potential customers more quickly on those areas most likely to deliver benefits, thus shortening test cycles and, we believe, accelerating the time to a license decision.
We believe these capabilities are helping us focus integration efforts for potential customers more quickly on those areas most likely to deliver benefits, thus shortening test cycles, reducing trial and error on silicon wafers and, we believe, accelerating the time to a license decision.
CMOS integrated circuits are the most widely used type of integrated circuits in the semiconductor industry. We believe MST has the potential to overcome the key challenges found in the implementation of next-generation nano-scale semiconductor devices incorporating CMOS type transistors, namely enhancing drive current, reducing leakage and reducing variability.
We believe MST has the potential to overcome the key challenges found in the implementation of next-generation nano-scale semiconductor devices incorporating CMOS type transistors, namely enhancing drive current, reducing leakage and reducing variability.
Instead, we develop and license technologies and processes that we believe offer the designers and manufacturers of integrated circuits a low-cost solution to the industry’s need for greater performance and lower power consumption.
We do not design or manufacture wafers or integrated circuits directly. Instead, we develop and license technologies and processes that we believe offer the designers and manufacturers of wafers and integrated circuits a low-cost solution to the industry’s need for greater performance and lower power consumption.
In addition, even if our MST technology meets our customers’ technical objectives one or more of our licensees may decide, for reasons unrelated to the price or performance of our MST technology, not to enter into manufacturing and distribution license agreements.
In addition, even if our MST technology meets our customers’ technical objectives one or more of our licensees may decide, for reasons unrelated to the price or performance of our MST technology, not to enter into R&D and HVM licenses.
MST is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry. We believe that by incorporating MST, transistors can be made smaller, with increased speed, reliability and power efficiency.
MST is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry. MST provides multiple benefits to the semiconductor manufacturing process, enabling transistors to be made smaller, with increased speed, reliability and power efficiency.
We have also simulated devices with leading industry research facilities and built (and electrically verified) test chips using MST in customer manufacturing facilities which have produced results that demonstrate many of the benefits described above. Development Partnerships Synopsys .
We have also simulated devices with leading industry research facilities and built (and electrically verified) test chips using MST in customer manufacturing facilities which have produced results that demonstrate many of the benefits described above. MST technology is an advanced material with many diverse applications.
Our research and development is conducted internally, but we work closely with third parties in the semiconductor industry to evaluate and qualify our technology for incorporation into semiconductor products and fabrication equipment.
We also dedicate research and development resources to evolving and expanding our technology to address new process technologies in the semiconductor industry roadmap. Our research and development is conducted internally, but we work closely with third parties in the semiconductor industry to evaluate and qualify our technology for incorporation into semiconductor products and fabrication equipment.
In the last three years, semiconductor fabs have generally been running at high capacity to keep up with industry supply shortages which has made it challenging for us to run wafers through our customers’ fabrication lines.
In the last three years, semiconductor fabs have generally been running at high capacity as demand is rapidly outpacing capacity, which has made it challenging for us to run wafers through our customers’ fabrication lines.
Item 1. Business Company Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $550+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick.
Item 1. Business Company Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $700+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon.
Both of these MST solutions fill a growing need for reducing power consumption and improving energy efficiency. We believe MST has the potential to overcome the key challenges found in the implementation of next generation nano-scale semiconductor devices incorporating CMOS-type transistors, namely enhancing drive current, reducing leakage and reducing variability.
We believe MST has the potential to overcome key challenges found in the implementation of next generation nano-scale semiconductor devices incorporating CMOS-type transistors, namely enhancing drive current, reducing leakage and reducing variability.
During the years ended December 31, 2024 and 2023, we incurred research and development expenses of approximately $11.0 million and $12.5 million, respectively. 8 We believe that our success depends in part on our ability to achieve the following in a cost-effective and timely manner: · enable customers to integrate MST into their products; · develop new technologies that meet the changing needs of the semiconductor industry; · improve our existing technologies to enable growth into new application areas; and · expand our intellectual property portfolio.
We believe that our success depends in part on our ability to achieve the following in a cost-effective and timely manner: · enable customers to integrate MST into their products; · develop new technologies that meet the changing needs of the semiconductor industry; · improve our existing technologies to enable growth into new application areas; and · expand our intellectual property portfolio.
However, our ability to enter into royalty-based manufacturing and distribution agreements with licensees under our integration license agreements and JDAs will depend, in large part, on the performance of devices they build using MST and the successful integration of our MST technology on a high-volume production scale.
However, our ability to enter into royalty-based agreements will depend on the performance of devices our customers build using MST and the successful integration of our MST technology on a high-volume production scale.
By doing so, we believe they will simultaneously stimulate additional sales of their capital equipment and encourage more customers to adopt MST. Through our collaboration with Synopsys, we enable potential customers of MST to more quickly assess the potential benefits of MST to their semiconductor devices.
We believe that our relationships with leading OEMs, especially the collaboration under our strategic marketing agreement, will simultaneously drive additional sales of their capital equipment and encourage more customers to adopt MST. Through our collaboration with Synopsys, we enable potential customers of MST to more quickly assess the potential benefits of MST to their semiconductor devices.
As of December 31, 2024, we have been granted 108 patents in the U.S. and 112 abroad and we have 50 pending patent applications in the U.S. and 77 abroad.
As of December 31, 2025, we have been granted 119 patents in the U.S. and 130 abroad and we have 75 pending patent applications in the U.S. and 106 abroad.
Under these integration license agreements, customers have paid us for the right to evaluate MST technology, which is integrated onto their semiconductor wafers. We deposit MST onto the customers’ wafers and the customer has the right under the license agreement to complete the manufacturing process, which enables them to evaluate our technology and to provide limited samples to their customers.
We deposit MST onto the customers’ wafers and the customer has the right under the license agreement to complete the manufacturing process, which enables them to evaluate our technology and to provide limited samples to their customers. AKM, our fabless licensee and our foundry licensee are in our Phase Three (MST Integration).
JDAs are an example of an engagement format that may combine engineering service, development, manufacturing, process optimization and other joint activities that do not follow the order described above.
While the above steps describe a model customer engagement, we have engaged with some customers in ways that do not follow this precise order. JDAs are an example of an engagement format that may combine engineering service, development, manufacturing, process optimization and other joint activities that do not follow the order described above.
Consequently, we believe that by incorporating MST, designers can make transistors with increased speed, reliability and energy efficiency, without significantly altering the current fabrication process or cost of production.
MST is a material deposited epitaxially, and as such we believe that MST can leverage tools and process steps that are already deployed in industry-standard manufacturing flows. Consequently, we believe that by incorporating MST, designers can make transistors with increased speed, reliability and energy efficiency, without significantly altering the current fabrication process or cost of production.
Upon commencement of sales of wafers or devices built using MST, our customer will pay us a royalty that will be a percentage of the selling price of the wafer or device, depending on the terms agreed in the applicable license agreement. 6 While the above steps describe a model customer engagement, we have engaged with some customers in ways that do not follow this precise order.
Upon commencement of sales of wafers or devices built using MST, our customer will be required to pay us a royalty that will be a percentage of the selling price of the wafer or device, depending on the terms agreed in the applicable license agreement.
Since 2017 we have worked in collaboration with Synopsys, Inc., a provider of the most broadly used TCAD simulation software in the semiconductor industry. As a result of our collaboration, Synopsys’ software now supports modeling of MST, which enables semiconductor manufacturers and designers to model the interaction of MST with other process steps.
Since 2017 we have worked in collaboration with Synopsys, Inc., a provider of the most broadly used TCAD simulation software in the semiconductor industry. As a result of our collaboration, we developed our MSTcad software which runs on Synopsys’ Sentaurus TCAD software and enables semiconductor engineers to simulate the benefits of integrating MST in a variety of devices.
We believe that our success is dependent upon the adoption of our MST technology through to commercial production by at least one IDM, foundry, or fabless semiconductor manufacturer. As of the date of this Annual Report, MST was in the integration phase (Phase Three as described above) on 14 different engagements and two engagements in Phase Four (process installation).
We believe that our success is dependent upon the adoption of our MST technology through to commercial production by at least one IDM, foundry, or fabless semiconductor manufacturer.
Shown in the diagram below are two illustrative implementations of MST in advanced CMOS transistors. The first incorporates MST into the channel region of the transistor which can help to reduce gate leakage (translates to lower off-state power consumption) while the second shows MST incorporated into the source/drain region of the transistor.
The figure on the left shows incorporation of MST into the channel region of the transistor which can help to reduce gate leakage (resulting in lower off-state power consumption) while the figure on the right shows MST incorporated into the source/drain region of the transistor.
Likewise, third parties like equipment OEMs, universities, or other material providers may offer solutions which have some of the same benefits that MST offers. We believe that our technology has far more effective, well-developed and fully-supported performance improvements than those offered by these third parties.
Likewise, third parties like equipment OEMs, universities, or other material providers may offer solutions which have some of the same benefits that MST offers.
We also executed a JDA with a major semiconductor foundry which contains technical targets which, if achieved, should result in paid licenses and engineering services revenue.
We also executed a JDA with a major semiconductor foundry which contains technical targets which, if achieved, should result in paid licenses and engineering services revenue. As of the date of this Annual Report, we are actively engaged running wafers with this second JDA customer to demonstrate MST benefits in their manufacturing process.
Among its many attributes, CMOS allows for a higher density of transistors on a chip and lower power usage than non-CMOS technologies. 2 The Pursuit of Increased Semiconductor Performance For years, the semiconductor industry was able to almost double the number of transistors it could pack into a single microchip about every two years, a rate of improvement commonly known as “Moore’s Law.” The semiconductor industry uses the term “node” to describe the minimum line width or geometry on a semiconductor chip, expressed in nanometers, or nm, for today’s technologies.
This convergence of cloud-scale AI infrastructure and intelligent edge devices has significantly accelerated demand for advanced semiconductors that can deliver orders of magnitude improvements in compute performance per watt, while supporting the bandwidth and interconnect speeds required for workloads at every scale from data center to endpoint. 2 The Pursuit of Increased Semiconductor Performance For years, the semiconductor industry was able to almost double the number of transistors it could pack into a single microchip about every two years, a rate of improvement commonly known as “Moore’s Law.” The semiconductor industry uses the term “node” to describe the minimum line width or geometry on a semiconductor chip, expressed in nanometers, or nm, for today’s technologies.
An R&D license, which includes the rights granted in an integration license and grants our customer the rights to install MST on a tool in their fab and to manufacture MST-enabled products for internal use only; and 3. A high-volume manufacturing, or HVM, license which grants the rights to manufacture and sell MST-enabled products to their customers.
A “commercial license” consists of (i) an R&D license, which grants our customer the rights to install MST on a tool in their fab and to manufacture MST-enabled products, but only for internal use and limited customer sampling and (ii) a high-volume manufacturing, or HVM, license which grants the rights to manufacture and sell MST-enabled products to their customers. 1 Depending upon our customers’ business needs and how we initially engaged with them, we may make these license grants in one or more separate contracts.
The upfront license fee becomes larger at each stage. Upon the grant of an HVM license, our licensees are also required to make royalty payments to us based on the number and/or sales price of MST-enabled products they sell to their customers either at the wafer or individual chip level.
Upon the grant of an HVM license, our licensees are also required to make royalty payments to us based on the number and/or sales price of MST-enabled products they sell. We have engaged with certain customers under joint development agreements, or JDAs. Our JDAs include development, technology transfer, manufacturing and licensing components.
Our customers and partners include foundries, integrated device manufacturers, or IDMs, fabless semiconductor manufacturers, OEMs that manufacture epitaxial deposition tools (also known as epi machines), and electronic design automation software companies, such as Synopsys. 5 Our business model is to enter into licensing arrangements whereby foundries and IDMs pay us a license fee for their use of MST technology in the manufacture of silicon wafers as well as a royalty for each product.
Our customers and partners include foundries, integrated device manufacturers, or IDMs, fabless semiconductor manufacturers, OEMs that manufacture epitaxial deposition tools (also known as epi machines), wafer manufacturers, and electronic design automation software companies, such as Synopsys.
Because shrinking geometries at the smaller nodes incurs higher capital and manufacturing costs, only a limited number of companies can afford to continue investing in those nodes. These constraints have caused semiconductor designers and manufacturers to increasingly rely on engineered materials, like MST, to deliver node-over-node increases transistor performance without having to rely solely on dimensional (lithographic) feature scaling..
Because shrinking geometries at the smaller nodes incurs higher capital and manufacturing costs, only a limited number of companies can afford to continue investing in those nodes.
In addition, we offer fee-based engineering services to customers evaluating MST. Our goal is that MSTcad licensing and engineering service arrangements will be tools that demonstrate the benefits of MST and will lead customers to enter into full commercial licenses. A “full commercial license” involves a three-stage approach consisting of: 1.
Our goal is that MSTcad licensing and engineering service arrangements will be tools that demonstrate the benefits of MST when integrated into customers’ manufacturing processes and will lead customers to enter into commercial license agreements.
Research and Development The principal focus of our research and development efforts is on enabling existing and prospective customers to integrate MST into their manufacturing processes and enable them to commercialize MST-enabled semiconductor products. We also dedicate research and development resources to evolving and expanding our technology to address new process technologies in the semiconductor industry roadmap.
We believe that our technology can provide far more effective, well-developed and fully-supported performance improvements than those offered by these third parties. 8 Research and Development The principal focus of our research and development efforts is on enabling existing and prospective customers to integrate MST into their manufacturing processes and enable them to commercialize MST-enabled semiconductor products.
We have engaged with certain customers under joint development agreements, or JDAs. Our JDAs include development, technology transfer, manufacturing and licensing components. To date, applications of our MST technology have primarily been for power devices, RFSOI devices and advanced CMOS integrated circuits including logic and memory.
To date, applications of our MST technology have primarily been for power devices, RFSOI devices and advanced CMOS integrated circuits including logic and memory. CMOS integrated circuits are the most widely used type of integrated circuits in the semiconductor industry.
There can be no assurance, however, that ST will complete its process qualification and pursue the licensed rights through to the commercial manufacture and sale of MST-enabled products. We have two JDAs in place. The first is with a leading semiconductor provider for integration of our MST technology into their manufacturing process.
The first is with a leading semiconductor provider for integration of our MST technology into their manufacturing process.
In December 2020, we announced availability of our MSTcad software which runs on Synopsys’ Sentaurus TCAD software and enables semiconductor engineers to simulate the benefits of integrating MST in a variety of devices. We continually refine our MSTcad software by calibrating our models against measured silicon results and we regularly release updates to that software.
We continually refine MSTcad by calibrating our models against measured silicon results and we regularly release updates that incorporate calibrated results and new functionality.
We utilize this tool to perform deposition on both customer and internal R&D wafers. The terms of our tool lease include the lessor’s maintenance and support as well as access to a cleanroom with advanced cleaning and inspection tools. MST Commercialization We do not intend to design or manufacture integrated circuits directly.
Our other epi tool is a 200mm ASM Epsilon reactor leased from Lawrence Semiconductor in Tempe Arizona. The terms of both tool leases include the lessor’s maintenance and support as well as access to a cleanroom with advanced cleaning and inspection tools.
MSTcad has been increasingly used by existing and potential customers to identify applications where MST can have the greatest benefit, without requiring access to customer fabs. Epi Tool Lease. In August 2021 we entered into a five-year lease for an Applied Materials Centura epitaxial deposition reactor which handles both 200mm and 300mm wafers.
In addition, the cost of wafers containing the most advanced devices has increased substantially due to the complexity of those devices, so MSTcad has been increasingly used by existing and potential customers to identify applications where MST can have the greatest benefit. 5 Epi Tool Leases.
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An integration license that provides our customer the right to use MST technology (with MST film deposited for the customer by Atomera) in the manufacture of silicon wafers for internal testing and sampling; 2.
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In addition, we offer fee-based integration engineering services to customers evaluate the effects of MST as integrated into their manufacturing flow. Typically we offer these services through paid evaluation arrangement, joint development agreements (JDAs) or integration license agreements.
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In 2024, we changed the terminology of our licenses.
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Our preferred model is to charge our customers upfront license fees for each license grant.
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Previously, our R&D license was referred to as a “manufacturing license” and our HVM license was called a “distribution license.” However, the rights conferred to customers under each of these licenses did not change and the terms are used interchangeably in this Annual Report. 1 Depending upon our customers’ business needs and how we initially engaged with them, we may make these license grants in one or more separate contracts.
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Under our licensing model, the R&D license fee is due upon installation of MST in a tool at our customer’s fab and a larger HVM license fee will be due when our customer completes qualification of MST in their process and before they can sell MST -enabled products to their customers.
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Shares of our common stock are listed on the NASDAQ Capital Market under the symbol “ATOM”. Industry Overview Semiconductors, Generally Recent years have seen a remarkable proliferation of consumer and commercial products, especially in wireless, automotive and high-speed devices. Cloud computing and artificial intelligence technologies have provided people with new ways to create, store and share information.
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Shares of our common stock are listed on the NASDAQ Capital Market under the symbol “ATOM”. Industry Overview Semiconductors, Generally The global semiconductor market has experienced extraordinary acceleration, with Fortune Business Insights reporting that the market reached $681 billion in 2024, rebounding sharply from the industry's 2023 downturn.
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At the same time, the increasing use of electronics in cars, buildings, appliances and other consumer products is creating a broad landscape of “smart” devices such as wearable technologies and The Internet of Things. Artificial Intelligence (AI) is being widely adopted by both the enterprise and consumer, and the infrastructure required for the processing of AI workloads is considerable.
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The market is projected to grow to $755 billion in 2025 and continue expanding at an approximately 15% compound annual growth rate through 2032, driven almost entirely by artificial intelligence (AI) workloads. The explosive growth of AI is fundamentally reshaping semiconductor demand.
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The COVID-19 pandemic accelerated trends toward remote and hybrid work, cloud computing and mobile devices. These trends coincided with the increasing rollout of 5G cellular networks and associated devices, augmented and virtual reality technologies, cryptocurrencies, and especially artificial intelligence technology, all of which require high levels of processing power.
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Data center infrastructure is expanding at an unprecedented rate to support large language models, generative AI, and machine learning applications. Power delivery and thermal management have emerged as critical constraints, as hyperscale data centers struggle with multi-megawatt power densities per rack.
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These trends in both enterprise and consumer applications are driving increasing demand for integrated circuits and systems with greater functionality and performance, reduced size, and much less power consumption as key requirements. These developments depend, in large part, on integrated circuits, or microchips, which are sets of electronic circuits on a single chip of semiconductor material, normally silicon.
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Meanwhile, high-speed wireless connectivity has become ubiquitous, with 5G networks now widely deployed and driving demand for edge computing capabilities that bring processing closer to end users and devices.
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It is common for a single semiconductor chip to combine many components (processor, communications, memory, custom logic, input/output) resulting in highly complex chip designs.
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We believe that MST can offer improved, performance, lower power consumption or better trade-offs between power and performance at a time when the industry is under pressure to deliver on both fronts and in shorter timeframes Our customers, partners and target customers have been increasingly adopting new innovations that extend the scaling formula, including those based on the use of new engineered materials.
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Transistors are the building blocks of integrated circuits and the most complex semiconductor chips today contain more than 100 billion transistors, each of which may have features that are much less than 1/1,000 th the diameter of a human hair. The most widely used transistors in semiconductor chips today are based on CMOS technology.
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The increased focus on new materials along with lithography scaling has been particularly pronounced in the most advanced logic applications, where customers are employing a three-dimensional “Gate-All-Around” (GAA) transistor architecture and in DRAM. Both of those markets are direct beneficiaries of trends in AI and they are market opportunities that our MST technology seeks to address.
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In other words, innovation in chip and system design today often hinges on “better, sooner and cheaper.” We believe that the semiconductor industry has accepted that moving forward in the nano-era will require adoption of new innovations that extend the scaling formula, including those based on the use of new engineered materials, a market opportunity our MST technology seeks to address.
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In 2025 we began offering a variant of MST-SPX optimized for a transistor architecture known as “trenchFETs” which are specifically optimized to handle higher-voltage workloads and are increasingly deployed in data center power supplies. These MST solutions fill a growing need for reducing power consumption and improving energy efficiency.
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This latter implementation helps control dopant diffusion into the channel which improves control of how the transistor turns on and the variability of the transistor operation. In addition, we believe that MST has the potential to deliver these benefits through a single technology that requires relatively minor modifications to industry-standard CMOS manufacturing flows.
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Many RF design companies choose to design their circuits on a specialized substrate called a Radio Frequency Silicon-On-Insulator or RFSOI wafer due to its attractive properties for RF circuits. A large percentage of the RF front-end components in mobile phones today use products based on RFSOI wafers.
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In addition, we may from time to time enter into evaluation license agreements with certain customers under which they may install MST in their fabs to run internal tests only and not for commercial use or distribution. Other potential customers may run tests on wafers containing MST prior to further engagement with us to integrate MST into their manufacturing process.
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Although RFSOI has some performance advantages, RF designers are facing challenges in optimizing performance, power consumption, and die size similar to the challenges faced in advanced logic and power products. We work with the RF design firms to optimize the use of MST on their wafers to achieve industry-leading characteristics.
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One of these Phase Four customers is ST Microelectronics (“ST”), our first customer to sign a full commercial license. We are also working with OEMs on process development and equipment optimization to ensure that MST can be reliably and predictably deposited using their manufacturing tools.
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We believe that MST enables designers to optimize both the RF switch and Low Noise Amplifier (LNA) devices through a single implementation on an RFSOI wafer. We work with foundries, IDMs and fabless designers as well as with the RFSOI wafer manufacturers themselves.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may not be successful in defending such litigation and may not be able to procure any required royalty or license agreements on acceptable terms or at all. 16 Risks Related to Owning Our Common Stock The market price of our shares may be subject to fluctuation and volatility. You could lose all or part of your investment .
Biggest changeRisks Related to Owning Our Common Stock The market price of our shares may be subject to fluctuation and volatility. You could lose all or part of your investment . The market price of our common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control.
The market price of our shares on the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: · actual or anticipated variations in our results of operations and financial condition; · market acceptance of our MST technology; · success or failure of our research and development projects; · announcements of technological innovations by us; · failure by us to achieve a publicly announced milestone; · failure by us to meet expectations of investors, some of which may not be within our control or be related to our public announcements; · delays between our expenditures to develop and market new or enhanced technological innovations and the generation of licensing revenue from those innovations; · developments concerning intellectual property rights, including our involvement in litigation brought by or against us; · changes in the amounts that we spend to develop, acquire or license new technologies or businesses; · our sale or proposed sale, or the sale by our significant stockholders, of our shares or other securities in the future; · changes in our key personnel; · changes in earnings estimates or recommendations by securities analysts, if we continue to be covered by analysts; · the trading volume of our shares; and · general economic and financial market conditions and other factors, including factors unrelated to our operating performance.
The market price of our shares on the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: · actual or anticipated variations in our results of operations and financial condition; · market acceptance of our MST technology; · success or failure of our research and development projects; 16 · announcements of technological innovations by us; · failure by us to achieve a publicly announced milestone; · failure by us to meet expectations of investors, some of which may not be within our control or be related to our public announcements; · delays between our expenditures to develop and market new or enhanced technological innovations and the generation of licensing revenue from those innovations; · developments concerning intellectual property rights, including our involvement in litigation brought by or against us; · changes in the amounts that we spend to develop, acquire or license new technologies or businesses; · our sale or proposed sale, or the sale by our significant stockholders, of our shares or other securities in the future; · changes in our key personnel; · changes in earnings estimates or recommendations by securities analysts, if we continue to be covered by analysts; · the trading volume of our shares; and · general economic and financial market conditions and other factors, including factors unrelated to our operating performance.
We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend. Therefore, you should not expect to receive cash dividends on our common stock. 17 Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable .
We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend. Therefore, you should not expect to receive cash dividends on our common stock. Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable .
In order to validate the benefits of MST, our customer engagement process involves fabrication of wafers that incorporate MST deposited by us using our epitaxial deposition tools and then completing the manufacturing of the wafers in our customers’ facilities using their tools. The semiconductor industry in 2024 exceeded $550 billion in sales.
In order to validate the benefits of MST, our customer engagement process involves fabrication of wafers that incorporate MST deposited by us using our epitaxial deposition tools and then completing the manufacturing of the wafers in our customers’ facilities using their tools. The semiconductor industry in 2025 exceeded $700 billion in sales.
Our integration license agreements with our current licensees do not commit them to manufacturing or distribution licenses and we expect those licensees to perform additional tests on evaluation wafers under their respective integration licenses before deciding whether to enter the next stages of licensing MST.
Our integration license agreements with our current licensees do not commit them to R&D or HVM licenses and we expect those licensees to perform additional tests on evaluation wafers under their respective integration licenses before deciding whether to enter the next stages of licensing MST.
As an early-stage company, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business, including, without limitation: · the timing and success of our plan of commercialization and the fact that we have entered into only one full commercial license with a customer, ST; · our ability to replicate on a large commercial scale the benefits of our MST technology that we have demonstrated in preliminary testing; · our ability to execute joint development agreements with potential customers; · our ability to structure, negotiate and enforce license agreements that will allow us to operate profitably; · our ability to advance our license agreement with ST through the qualification phase, complete the HVM license milestone with ST and earn the corresponding license fee and subsequently reach the phase in which ST ships royalty-bearing products, which is core to our business model; · our ability to advance the licensing arrangements with our RF licensee and our foundry licensee to R&D and HVM licenses and to shipment of royalty-bearing products; · our success in capitalizing on the achievement of the technical milestones in our first JDA in order to enter into one or more distribution and royalty agreements with business units of that JDA customer as well as our success in meeting technical milestones in the JDA with our second JDA customer; · our ability to convert licensees of our MSTcad software to licenses of our MST technology under commercial license agreements and to successfully utilize MSTcad in both internal development and customer evaluations; · our ability to protect our intellectual property rights; and · our ability to raise additional capital as and when needed.
As an early-stage company, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business, including, without limitation: · the timing and success of our plan of commercialization; · our ability to replicate on a large commercial scale the benefits of our MST technology that we have demonstrated in preliminary testing; · our ability to execute joint development agreements with potential customers; · our ability to structure, negotiate and enforce license agreements that will allow us to operate profitably; · our ability to advance our license agreement with ST Microelectronics (ST) through the qualification phase, where it is currently on hold; 10 · our ability to advance the licensing arrangements with our RF licensee and our foundry licensee to R&D and HVM licenses and to shipment of royalty-bearing products; · our success in capitalizing on the achievement of the technical milestones in our first JDA in order to enter into one or more distribution and royalty agreements with business units of that JDA customer as well as our success in meeting technical milestones in the JDA with our second JDA customer; · our ability to convert licensees of our MSTcad software to licenses of our MST technology under commercial license agreements and to successfully utilize MSTcad in both internal development and customer evaluations; · our ability to protect our intellectual property rights; and · our ability to raise additional capital as and when needed.
We face risks inherent in a royalty-based business model, many of which are outside of our control, such as the following: · the rate of adoption and incorporation of our technology by semiconductor designers and manufacturers and the manufacturers of semiconductor fabrication equipment; · customers’ willingness to agree to an ongoing royalty model, which may impact their product costs and margins; · our licensee customers’ ability to successfully market MST-enabled products to their end customers; · the length of the design cycle and the ability to successfully integrate our MST technology into integrated circuits; · the demand for products incorporating semiconductors that use our licensed technology; · the cyclicality of supply and demand for products using our licensed technology; · the impact of economic downturns; and · the timing of receipt of royalty reports and the applicable revenue recognition criteria, which may result in fluctuation in our results of operations. 12 We may need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all.
We face risks inherent in a royalty-based business model, many of which are outside of our control, such as the following: · the rate of adoption and incorporation of our technology by semiconductor designers and manufacturers and the manufacturers of semiconductor fabrication equipment; · customers’ willingness to agree to an ongoing royalty model, which may impact their product costs and margins; · customers’ ability to successfully market MST-enabled products to their end customers; · the length of the design cycle and the ability to successfully integrate our MST technology into integrated circuits; · the demand for products incorporating semiconductors that use our licensed technology; 12 · the cyclicality of supply and demand for products using our licensed technology; · the impact of economic downturns; and · the timing of receipt of royalty reports and the applicable revenue recognition criteria, which may result in fluctuation in our results of operations.
While we have entered into one commercial license agreement, four integration license agreements and two joint development agreements, there can be no assurance that any of these relationships will advance to further licensing stages or to royalty-based distribution license agreements .
While we have entered into one commercial license agreement, four integration license agreements and two joint development agreements, there can be no assurance that any of these relationships will advance to further licensing stages or to royalty-based distribution license agreements . Neither of our JDAs commits the customers to take MST to production.
These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.
This restriction lasts for a period of three years following the share acquisition. These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.
If we fail to obtain patents in a timely manner or if the patents issued to us do not cover all of the inventions disclosed in our patent applications, others could use portions of our technology and intellectual property without the payment of license fees and royalties. 15 We also rely on trade secret laws rather than patent laws to protect other portions of our proprietary technology.
If we fail to obtain patents in a timely manner or if the patents issued to us do not cover all of the inventions disclosed in our patent applications, others could use portions of our technology and intellectual property without the payment of license fees and royalties.
For the years ended December 31, 2024 and 2023, we have incurred net losses of approximately $18.4 million and $19.8 million, respectively, and our operations have used approximately $13.2 million and $14.6 million of cash, respectively. As of December 31, 2024, we had an accumulated deficit of approximately $221.5 million.
For the years ended December 31, 2025 and 2024, we have incurred net losses of approximately $20.2 million and $18.4 million, respectively, and our operations have used approximately $14.9 million and $13.2 million of cash, respectively. As of December 31, 2025, we had an accumulated deficit of approximately $241.7 million.
Over the past three years, some segments of the industry have been characterized by product shortages as strong demand has outstripped supply, resulting in tight capacity among our potential customers, while other segments have experienced softness and excess supply as part of the correction of COVID-era supply-chain disruptions .
The combination of recovery from COVID-era supply-chain disruptions and the rapid growth in demand driven by AI, some segments of the industry have been characterized by product shortages as strong demand has outstripped supply, resulting in tight capacity among our potential customers, while other segments have experienced softness and excess supply.
In addition, even if our MST technology is successfully integrated into the licensees’ products, any or all of our licensees may decide, for reasons unrelated to the price or performance of our MST technology, not to enter the subsequent license phases or execute the additional license agreements required to take MST to commercial production.
In addition, even if our MST technology is successfully integrated into the licensees’ products, any or all of our licensees may decide, for reasons unrelated to the price or performance of our MST technology, not to enter the subsequent license phases or execute the additional license agreements required to take MST to commercial production. 11 We expect that our product qualification and licensing cycle will be lengthy and costly, and our marketing, engineering and sales efforts may be unsuccessful.
While we believe our JDAs and our integration license agreements should accelerate licensing decisions by other customers, the evaluation process for new technologies in the semiconductor industry is inherently long and complex and there can be no assurance that we will successfully convert other customer prospects into paying customers or that any of these customers will generate sufficient revenue to cover our expenses. 11 Qualification of our MST technology requires access to our potential customers’ manufacturing tools and facilities, as well as to leased tools and facilities, which may not be available on a timely basis or at all.
While we believe our JDAs and our integration license agreements should accelerate licensing decisions by other customers, the evaluation process for new technologies in the semiconductor industry is inherently long and complex and there can be no assurance that we will successfully convert other customer prospects into paying customers or that any of these customers will generate sufficient revenue to cover our expenses.
The provisions in our certificate of incorporation and bylaws: · limit who may call stockholder meetings; · do not permit stockholders to act by written consent; · allow us to issue blank check preferred stock without stockholder approval; · do not provide for cumulative voting rights; and · provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.
The provisions in our certificate of incorporation and bylaws: · limit who may call stockholder meetings; · do not permit stockholders to act by written consent; · allow us to issue blank check preferred stock without stockholder approval; · do not provide for cumulative voting rights; and · provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum. 17 In addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied.
There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability. 10 We have a history of significant operating losses and anticipate continued operating losses for at least the near term.
Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability. We have a history of significant operating losses and anticipate continued operating losses for at least the near term.
Although these supply/demand imbalances and uneven capacity conditions have started to normalize throughout 2024, we have experienced delays in completing the processing of evaluation wafers by our customers as those customers prioritize utilization of their equipment for production use.
We have experienced delays in completing the processing of evaluation wafers by our customers as those customers prioritize utilization of their equipment for production use.
Further, the laws and enforcement regimes of certain countries do not protect our technology and intellectual property to the same extent as do the laws and enforcement regimes of the U.S. In certain jurisdictions, we may be unable to protect our technology and intellectual property adequately against unauthorized use, which could adversely affect our business.
Further, the laws and enforcement regimes of certain countries do not protect our technology and intellectual property to the same extent as do the laws and enforcement regimes of the U.S.
As such, we will incur additional expenses in our engagements with our licensees before we receive license fees, if any, for manufacturing and distribution and before any subsequent royalty stream begins. Although we have successfully completed the objectives of our first JDA and granted that customer a manufacturing license, the agreement does not commit our customer to a distribution license.
As such, we will incur additional expenses in our engagements with our licensees before we receive license fees, if any, for manufacturing and distribution and before any subsequent royalty stream begins..
A court invalidation or limitation of our key patents could significantly harm our business . Our patent portfolio contains some patents that are particularly significant to our MST technology.
In certain jurisdictions, we may be unable to protect our technology and intellectual property adequately against unauthorized use, which could adversely affect our business. 15 A court invalidation or limitation of our key patents could significantly harm our business . Our patent portfolio contains some patents that are particularly significant to our MST technology.
As of December 31, 2024, we had total assets of approximately $29.1 million, cash, cash-equivalents and short-term investments of approximately $26.8 million and working capital of approximately $23.5 million. We believe that we have sufficient capital to fund our current business plans and obligations over, at least, the 12 months following the date of this Annual Report.
We believe that we have sufficient capital as of the date of this report to fund our current business plans and obligations over, at least, the 24 months following the date of this Annual Report.
If patent holders or other holders of intellectual property initiate legal proceedings, we may be forced into protracted and costly litigation.
If patent holders or other holders of intellectual property initiate legal proceedings, we may be forced into protracted and costly litigation. We may not be successful in defending such litigation and may not be able to procure any required royalty or license agreements on acceptable terms or at all.
ST has successfully installed our MST film recipe and they have accepted our film under the license agreement, resulting in the grant of an R&D license to them enabling them to manufacture MST wafers for internal use, but there can be no assurance that our MST technology will deliver the performance, power or other requirements that ST or our other customers seek for their products or that the integration of our technology with our customers’ manufacturing process will be successful in high volume.
There can be no assurance whether or when ST will re-commence qualification of MST technology or that, in the event they do proceed, that MST will deliver the performance, power or other requirements that ST or our other customers seek for their products or that the integration of our technology with our customers’ manufacturing process will be successful in high volume.
However, trade secrets can be difficult to protect. The misappropriation of our trade secrets or other proprietary information could seriously harm our business. We protect our proprietary technology and processes, in part, through confidentiality agreements with our employees, consultants, suppliers and customers.
We also rely on trade secret laws rather than patent laws to protect other portions of our proprietary technology. However, trade secrets can be difficult to protect. The misappropriation of our trade secrets or other proprietary information could seriously harm our business.
The market price of our common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control. Between January 1, 2024 and February 1, 2025, the reported high and low sales prices of our common stock have ranged from $2.31 to $17.55.
Between January 1, 2025 and February 20, 2026, the reported high and low sales prices of our common stock have ranged from $1.89 to $17.55.
Product liability claims in the future, regardless of their ultimate outcome, could have a material adverse effect on our business, financial condition and reputation, and on our ability to attract and retain licensees and customers. Effective as of January 31, 2024, we lost access to certain semiconductor manufacturing and engineering services which may be difficult and/or costly to replace.
Product liability claims in the future, regardless of their ultimate outcome, could have a material adverse effect on our business, financial condition and reputation, and on our ability to attract and retain licensees and customers. Risks Related to Intellectual Property If we fail to protect and enforce our intellectual property rights and our confidential information, our business will suffer.
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Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment.
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ST has successfully installed our MST film recipe and accepted our film under a commercial license agreement executed in April 2023, resulting in the grant of an R&D license to them enabling them to manufacture MST wafers for internal use.
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In September and October 2018, respectively, we entered into separate license agreements with AKM and ST, both of which are leading IDMs. In October 2019, we entered into a license agreement with a leading RF semiconductor supplier. In December 2021, we entered into a JDA with a leading semiconductor manufacturer.
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However, in October 2025 ST informed us that they would not complete the qualification of MST into their process after deciding to migrate their development of their targeted process to 300mm wafers.
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In February 2022, we entered into an integration license agreement with a semiconductor foundry. In April 2022 we entered into a JDA with a major semiconductor foundry.
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Qualification of our MST technology requires access to our potential customers’ manufacturing tools and facilities, as well as to leased tools and facilities, which may not be available on a timely basis or at all.
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Our integration licensees have paid us licensing fees for the right to build products that integrate MST technology onto their semiconductor wafers, but the agreements do not grant the licensees the right to sell products incorporating MST.
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We may need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all. As of December 31, 2025, we had total assets of approximately $21.1 million, cash and cash-equivalents of approximately $19.2 million and working capital of approximately $17.6 million.
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Such rights require our integration licensees to enter into additional license agreements that, if executed, would allow each licensee or their foundry to manufacture MST-enabled products and to sell them to their customers.
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On February 24, 2026, we completed a registered direct offering of shares of our common stock to institutional investors that resulted in net proceeds to us of approximately $23.6 million after commissions and offering expenses.
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R&D and HVM agreements such as our license agreement with ST provide for substantially larger upfront license fee payments than integration license fees and such agreements require licensees to make royalty payments to us based the number and sales price of MST-enabled products they sell to their customers.
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We protect our proprietary technology and processes, in part, through confidentiality agreements with our employees, consultants, suppliers and customers.
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Our first JDA customer paid us for an R&D license in the first quarter of 2021 when we delivered our MST recipe to them. In February 2022, we successfully achieved all the development milestones in the JDA resulting in additional revenue. Nevertheless, neither of our JDAs commits the customers to take MST to production.
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We expect that our product qualification and licensing cycle will be lengthy and costly, and our marketing, engineering and sales efforts may be unsuccessful.
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For example, increased inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital on acceptable terms, if at all. In response to rising inflation, the U.S.
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Federal Reserve has raised interest rates, which, coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks.
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Additionally, financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022 and the eruption of the Israeli/Palestinian conflict in October 2023, including as a result of economic sanctions and export controls against Russia and countermeasures taken by Russia.
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The full economic and social impact of these sanctions and countermeasures, in addition to the ongoing military conflicts in Ukraine and Gaza, which could conceivably expand, remains uncertain; however, both the conflicts and related sanctions have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, and/or supply chain continuity, in both Europe and globally, and has introduced significant uncertainty into global markets.
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While we do not currently operate in Russia, Ukraine or the Middle East, as the adverse effects of these conflicts continue to develop our business and results of operations may be adversely affected.
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From April 2016 through January 2024, we worked with TSI Technology Development & Commercialization Services LLC, or TSI under a Master R&D Services Agreement and a Manufacturing Agreement. Under these agreements, TSI provided us with foundry services, consisting of engineering and manufacturing services. In August 2023, TSI was acquired by Robert Bosch Semiconductor LLC, or Bosch.
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In October 2023, Bosch advised us that on January 31, 2024 it would cease providing engineering and manufacturing services to third parties, including Atomera, in order to commence the conversion of the TSI fab to production of Silicon Carbide semiconductor products. We are in active discussions with potential replacement providers of foundry services.
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However, there are few foundries that offer R&D services that are comparable to those provided by TSI, so we may face difficulty in replacing the services that TSI had provided. We have utilized TSI’s services for a portion of our internal R&D which required complete semiconductor device fabrication.
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No wafers sold or licensed to any customer have been fabricated at TSI. Accordingly, we do not believe that the loss of TSI’s services has had or will have a meaningful impact on any of our ongoing client engagements.
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However, our access to foundry services was interrupted while we were working to reach an agreement with a replacement foundry and adapt our R&D processes to those used at our replacement foundry. This transition may cause us to incur meaningful startup costs, may divert engineering resources from ongoing R&D activities and may increase our ongoing spending on outsourced engineering services.
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The potential inability to replace the TSI services may have a material adverse effect on the timing and cost of continuing to develop example applications and devices which exhibit the advantages of our MST technology. Risks Related to Intellectual Property If we fail to protect and enforce our intellectual property rights and our confidential information, our business will suffer.
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In addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. This restriction lasts for a period of three years following the share acquisition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, there can be no assurance that our internal information technology systems or those of our third-party contractors, or our consultants’ efforts to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruption, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security breach, industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm.
Biggest changeIn addition, there can be no assurance that our internal information technology systems or those of our third-party contractors, or our consultants’ efforts to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruption, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security breach, industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm. 18 As of the date of this report, we are not aware of cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Our senior management team conducts the regular assessment and management of material risks from cybersecurity threats, including review with our IT team and third-party service providers. All employees and consultants are directed to report to our senior management any irregular or suspicious activity that could indicate a cybersecurity threat or incident.
Governance . Our senior management team conducts the regular assessment and management of material risks from cybersecurity threats, including review with our IT team and third-party service providers. All employees and consultants are directed to report to our senior management any irregular or suspicious activity that could indicate a cybersecurity threat or incident.
The Audit Committee of our Board of Directors created a cybersecurity subcommittee in February 2023 which evaluates our cybersecurity assessment and management policies, including quarterly interviews with our senior officers. Our Audit Committee meets at least quarterly with our independent registered accounting firm and communicates with them regarding any cybersecurity related risks.
The Audit Committee of our Board of Directors has a cybersecurity subcommittee which evaluates our cybersecurity assessment and management policies, including quarterly interviews with our senior officers. Our Audit Committee meets at least quarterly with our independent registered accounting firm and communicates with them regarding any cybersecurity related risks.
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As of the date of this report, we are not aware of cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. Governance .
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The Audit Committee of our Board of Directors created a cybersecurity subcommittee in February 2023 which evaluates our cybersecurity assessment and management policies, including quarterly interviews with our senior officers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEffective May 1, 2023, we leased an additional 404 square feet at this location under an amendment to the current lease. Our current monthly lease payment is now $2,435 and will increase to $2,509 in March 2025. The lease ends in February 2026.
Biggest changeOur current monthly lease payment is now $2,509 and will increase to $2,526 in March 2026.
Item 2. Properties Our executive offices are presently located in a 4,101 square foot facility in Los Gatos, California pursuant to a five-year lease, expiring on January 31, 2026. As part of the amended lease entered into in August 2020, our current lease payment is $18,232.
Item 2. Properties Our executive offices are presently located in a 4,101 square foot facility in Los Gatos, California pursuant to a five-year lease extension, expiring on March 31, 2031. As part of the amended lease entered into in December 2025, our current lease payment is $17,019.
Beginning in March 2021, we began leasing 474 square feet of office space in Tempe, Arizona. The original lease had a two-year term, with an option to extend for an additional three years. The renewal option was exercised in January 2023.
Beginning in March 2021, we began leasing 474 square feet of office space in Tempe, Arizona. The original lease had a two-year term, with an option to extend for an additional three years. In February 2026, we extended this lease another three years, through February 2029, with the option to extend for an additional two years.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePlan Category Number of Securities to be Issued Upon Exercise of Outstanding Options (a) Weighted-Average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) Equity compensation plans approved by security holders 3,792,615 $ 6.64 1,189,591 Equity compensation plans not approved by security holders – – – Total 3,792,615 $ 6.64 1,189,591 20
Biggest changePlan Category Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights (a) (2)(3) Weighted-Average Exercise Price of Outstanding Options (1) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a) (4) Equity compensation plans approved by security holders 3,514,485 $ 6.53 2,238,698 Equity compensation plans not approved by security holders – – – Total 3,514,485 $ 6.53 2,238,698 (1) Restricted stock units issued under our equity compensation plans do not require payment by the recipient to us at the time of vesting.
Equity Compensation Plan Information Our 2007 Equity Incentive Plan, or 2007 Plan, expired in March 2017, however all options and warrants outstanding at the time of the expiration remained outstanding and exercisable by their term. In May 2017, we established our 2017 Stock Incentive Plan, or 2017 Plan.
Equity Compensation Plan Information Our 2007 Equity Incentive Plan, or 2007 Plan, expired in March 2017, however all options outstanding at the time of the expiration remained outstanding and exercisable by their term. In May 2017, we established our 2017 Stock Incentive Plan, or 2017 Plan.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the NASDAQ Capital Market under the symbol “ATOM”. Holders of Record As of February 28, 2025, there were 120 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the NASDAQ Capital Market under the symbol “ATOM”. Holders of Record As of February 19, 2026, there were 106 holders of record of our common stock.
As of December 31, 2024, awards of 3,706,063 shares of common stock had been granted under the 2017 Plan, net of forfeited restricted stock and option awards and a total of 43,937 shares of common stock are reserved for issuance. In May 2023, we established our 2023 Stock Incentive Plan, or 2023 Plan.
As of December 31, 2025, awards of 3,735,394 shares of common stock had been granted under the 2017 Plan, net of forfeited restricted stock and option awards and a total of 14,606 shares of common stock are reserved for issuance. In May 2023, we established our 2023 Stock Incentive Plan, or 2023 Plan.
All employees, officers, directors, consultants, advisors and other persons who provide services to us or any of our subsidiaries are eligible to receive incentive awards under the 2023 Plan.
In May 2025, our shareholders approved an amendment to the 2023 Plan, adding an additional 1,750,000 shares to this plan. All employees, officers, directors, consultants, advisors and other persons who provide services to us or any of our subsidiaries are eligible to receive incentive awards under the 2023 Plan.
As of December 31, 2024, awards of 854,346 shares of common stock had been granted under the 2023 Plan, net of forfeited restricted stock and option awards and a total of 1,145,654 shares of common stock are reserved for issuance.
As of December 31, 2025, awards of 1,525,908 shares of common stock had been granted under the 2023 Plan, net of forfeited restricted stock and option awards and a total of 2,224,092 shares of common stock are reserved for issuance. 20 The following table sets forth certain information as of December 31, 2025 about our stock plans under which our equity securities are authorized for issuance.
Removed
As of December 31, 2024, options to purchase 3,792,615 shares of common stock were outstanding under the 2007 Plan, the 2017 Plan and the 2023 Plan. The following table sets forth certain information as of December 31, 2024 about our stock plans under which our equity securities are authorized for issuance (in thousands, except exercise price).
Added
As such, the weighted-average exercise price does not take these awards into account and only takes into account outstanding stock options. (2) Includes 2,906,527 shares of our common stock underlying stock options issued under the 2023 Plan, 2017 Plan and 2007 Plan.
Added
(3) Includes 386,438 shares of common stock underlying time-based restricted stock units and 221,520 shares of common stock underlying performance-based restricted stock units issuable assuming performance at target under the 2023 Plan and 2027 Plan. (4) Includes awards issuable under the 2023 Plan and 2017 Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

39 edited+11 added−9 removed22 unchanged
Biggest changeOur customers and partners include: · foundries, which manufacture integrated circuits on behalf of fabless manufacturers; · integrated device manufacturers, or IDMs, which are the fully-integrated designers and manufacturers of integrated circuits; · fabless semiconductor manufacturers, which are designers of integrated circuits that outsource the manufacturing of their chips to foundries; · original equipment manufacturers, or OEMs, that manufacture the epitaxial, or epi, machines used to deposit semiconductor layers, such as the MST film, onto silicon wafers; and · electronic design automation companies, which make tools used throughout the industry to simulate performance of semiconductor products using different materials, design structures and process technologies. 21 Our commercialization strategy is to generate revenue through licensing arrangements whereby foundries, IDMs and fabless semiconductor manufacturers pay us a license fee for their right to use MST technology in the manufacture of silicon wafers as well as a royalty for each silicon wafer or device that incorporates our MST technology.
Biggest changeOur customers and partners include: · foundries, which manufacture integrated circuits on behalf of fabless manufacturers; · integrated device manufacturers, or IDMs, which are the fully-integrated designers and manufacturers of integrated circuits; · fabless semiconductor manufacturers, which are designers of integrated circuits that outsource the manufacturing of their chips to foundries; · Manufacturers of semiconductor wafers, which provide the substrates upon which integrated circuits are fabricated:; · original equipment manufacturers, or OEMs, that manufacture the epitaxial, or epi, machines used to deposit semiconductor layers, such as the MST film, onto silicon wafers; and · electronic design automation companies, which make tools used throughout the industry to simulate performance of semiconductor products using different materials, design structures and process technologies.
If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve its cash.
If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve our cash.
Lease expenses for financing leases consists of amortization of the ROU assets over the life of the lease and interest expense is recognized on the liability. Stock-based Compensation We have stock-based compensation programs, which include restricted stock awards (“RSAs”) and stock options and an employee stock purchase plan.
Lease expenses for financing leases consists of amortization of the ROU assets over the life of the lease and interest expense is recognized on the liability. Stock-based Compensation We have stock-based compensation programs, which include restricted stock awards (“RSAs”), Restricted stock Units (“RSUs”) and stock options and an employee stock purchase plan.
The preparation of financial statements in conformity with those accounting principles requires us to use judgement in making estimates and assumptions based on the relevant information available at the end of each period.
The preparation of financial statements in conformity with those accounting principles requires us to use judgment in making estimates and assumptions based on the relevant information available at the end of each period.
Cash Flows from Operating, Investing and Financing Activities: Net cash used in operating activities of approximately $13.2 million for year ended December 31, 2024 resulted primarily from our net loss of approximately $18.4 million, adjusted by approximately $3.9 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.3 million.
Net cash used in operating activities of approximately $13.2 million for year ended December 31, 2024 resulted primarily from our net loss of approximately $18.4 million, adjusted by approximately $3.9 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.3 million.
These estimates and assumptions have a significant effect on reported amounts of assets, liabilities, sales and expenses as well as the disclosure of contingent assets and liabilities because they result primarily from the need to make estimates and assumptions on matters that are inherently uncertain. Actual results could differ from our estimates.
These estimates and assumptions have a significant effect on reported amounts of assets, liabilities, sales and expenses as well as the disclosure of contingent assets and liabilities because they result primarily from the need to make estimates and assumptions on matters that are inherently uncertain.
Other income consisted primarily of a refundable state research and development tax credit, net of filing costs and tax consulting services for both years. Interest expense. Interest expense for the years ended December 31, 2024 and 2023 was approximately $129,000 and $194,000, respectively.
Other income for the years December 31, 2025 and 2024 was approximately $72,000 and $73,000, respectively. Other income consisted primarily of a refundable state research and development tax credit, net of filing costs and tax consulting services for both years. Interest expense. Interest expense for the years ended December 31, 2025 and 2024 was approximately $60,000 and $129,000, respectively.
For manufacturing licenses, revenue is recognized at the point in time when we deliver our MST recipe as the license to manufacture using MST technology is a right to use the Company’s technology and not a right to access the technology over time.
For R&D licenses, revenue is recognized at the point in time when we deliver our MST recipe because the license to manufacture products using MST technology is a right to use the Company’s technology and not a right to access the technology over time.
Net cash provided by financing activities of approximately $12.7 million for the year ended December 31, 2023 related primarily to net proceeds from our ATM Facility, offset in part by approximately $918,000 in principal payments on our financing lease. 24 Critical Accounting Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States.
Net cash provided by financing activities of approximately $20.3 million for the year ended December 31, 2024 related primarily to net proceeds from our ATM Facility, offset in part by approximately $1.1 million in principal payments on our financing lease. Critical Accounting Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States.
Integration license agreements contain a technology grant as well as a performance obligation to deliver wafers with our technology deposited on them. We have historically determined the grant of rights in these integration license agreements is not distinct from the integration service. Accordingly, revenue from integration license agreements is recognized as the service is provided to the customer.
Our engineering service agreements contain a technology grant as well as a performance obligation to deliver wafers with our technology deposited on them. We have historically determined the grant of rights in these agreements is not distinct from the obligation to deliver wafers and accordingly, revenue from these agreements is recognized at the time we deliver wafers.
Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the years ended December 31, 2024 and 2023, our operating expenses totaled approximately $19.3 million and $21.2 million, respectively. Research and development expenses.
Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the years ended December 31, 2025 and 2024, our operating expenses totaled approximately $20.9 million and $19.3 million, respectively. Research and development expenses.
Selling and marketing expenses consist primarily of salary and benefits for our sales and marketing personnel and business development consulting services. Selling and marketing expenses for the years ended December 31, 2024 and 2023 were approximately $1.1 million and $1.6 million, respectively, representing a decrease of approximately $546,000, or 34%.
Selling and marketing expenses consist primarily of salary and benefits for our sales and marketing personnel and business development consulting services. Selling and marketing expenses for the years ended December 31, 2025 and 2024 were approximately $758,000 and $1.1 million, respectively, representing a decrease of approximately $295,000, or 28%.
Leases We account for leases in accordance with Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No 2016-02, Leases (Topic 842). We determine if a contract contains a lease in whole or in part at the inception of the contract.
Actual results could differ from our estimates. 25 Leases We account for leases in accordance with Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No 2016-02, Leases (Topic 842). We determine if a contract contains a lease in whole or in part at the inception of the contract.
For the year ended December 31, 2024, we had a net loss of approximately $18.4 million and used approximately $13.2 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.
For the year ended December 31, 2025, we had a net loss of approximately $20.2 million and used approximately $14.9 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.
During the year ended December 31, 2023, we sold approximately 1.8 million shares at an average price per share of approximately $7.97, resulting in approximately $13.5 million of net proceeds to us after deducting commissions and other offering expenses.
During the year ended December 31, 2025, we sold approximately 1.6 million shares pursuant to the 2022 ATM and the 2025 ATM at an average price per share of approximately $5.15, resulting in approximately $7.6 million of net proceeds to us after deducting commissions and other offering expenses.
The fair value of our RSAs is measured at the market price of our common stock on the measurement date amortized over the vesting period of the award. The fair value for our stock option awards is determined at the grant date using the Black-Scholes Option Pricing Model and amortized over the vesting period of the option.
The fair value for our stock option awards is determined at the grant date using the Black-Scholes Option Pricing Model and amortized over the vesting period of the option.
Net cash provided by financing activities of approximately $20.3 million for the year ended December 31, 2024 related primarily to net proceeds from our ATM Facility, offset in part by approximately $1.1 million in principal payments on our financing lease.
Net cash provided by financing activities of approximately $7.4 million for the year ended December 31, 2025 related primarily to net proceeds from our ATM Facility and the exercise of stock options, offset in part by approximately $1.2 million in principal payments on our financing lease.
Inc and Craig-Hallum Capital Group LLC, as agents, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having aggregate offering proceeds of up to $50.0 million in an “at-the-market” or ATM offering, to or through the agents.
Inc. and Craig-Hallum Capital Group LLC (“Craig-Hallum”), as agents, under which we offered and sold, from time to time at our sole discretion, shares of our common stock in an at the market offering to or through the agents, having aggregate offering proceeds of up to $50.0 million (the “2022 ATM”).
Readers are urged to carefully review and consider the various disclosures made in this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Readers are urged to carefully review and consider the various disclosures made in this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. 21 Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $700+ billion semiconductor industry.
Interest expense is related to the tool financing lease entered into in August 2021. 23 Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents and short-term investments of approximately $26.8 million and working capital of approximately $23.5 million.
Interest expense is related to the tool financing lease entered into in August 2021. Liquidity and Capital Resources As of December 31, 2025, we had cash and cash equivalents of approximately $19.2 million and working capital of approximately $17.6 million.
Net cash used in investing activities of approximately $6.8 million and for year ended December 31, 2023 consisted primarily of the purchase of short-term available-for-sale investments, offset by the maturity of short-term available-for-sale investments.
Net cash provided in investing activities of approximately $951,000 for year ended December 31, 2025 consisted primarily of the maturity of short-term available-for-sale investments, offset by the acquisition of property and equipment.
To date, we have only generated limited revenue from customer engagements for engineering services, integration license agreements, an R&D license granted under a JDA, our license agreement with ST and licensing of MSTcad.
To date, we have only generated limited revenue from customer engagements for engineering services, integration license agreements, R&D licenses granted under a JDA and under our license agreement with ST and licensing of MSTcad. Our MSTcad licenses grant customers the right to use MSTcad software to simulate the effects of incorporating MST technology into their semiconductor manufacturing process.
The decrease in costs is primarily related to a reduction in headcount which decreased employee related costs, stock-based compensation and travel expenses. Interest income. Interest income for the years ended December 31, 2024 and 2023 was approximately $779,000 and $723,000, respectively.
The decrease in costs is primarily related to a reduction in headcount which decreased employee-related costs, stock-based compensation and travel expenses, partially offset by increases in recruiting costs to fill open positions. Interest income. Interest income for the years ended December 31, 2025 and 2025 was approximately $931,000 and $779,000, respectively, an increase of approximately $152,000, or 20%.
In addition, since MST is an additive and low-cost technology, we believe it can be deployed on an industrial scale, with machines commonly used in semiconductor manufacturing. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits. We do not design or manufacture integrated circuits directly.
We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits. We do not design or manufacture integrated circuits directly.
Net cash used in operating activities of approximately $14.6 million for year ended December 31, 2023 resulted primarily from our net loss of approximately $19.8 million, adjusted by approximately $4.0 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.4 million.
Cash Flows from Operating, Investing and Financing Activities: Net cash used in operating activities of approximately $14.9 million for year ended December 31, 2025 resulted primarily from our net loss of approximately $20.2 million, adjusted by approximately $5.0 million of stock-based compensation expense.
Accretion income relates to the increase in value of our available-for-sale securities from the purchase date through the maturity date. Other income/expense, net. Other income for the years December 31, 2024 and 2023 was approximately $73,000 and $75,000, respectively.
Accretion income relates to the increase in value of our available-for-sale securities from the purchase date through the maturity date. Accretion income relates to the increase in value of our available-for-sale securities from the purchase date through the maturity date. As of December 31, 2025, our cash and cash equivalents were held as cash and mutual funds. Other income/expense, net.
General and administrative expenses. General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel, office-related costs and professional fees. General and administrative costs for the years ended December 31, 2024 and 2023 were approximately $7.3 million and $7.1 million, respectively, representing an increase of approximately $191,000, or 3%.
General and administrative costs for the years ended December 31, 2025 and 2024 were approximately $7.8 million and $7.3 million, respectively, representing an increase of approximately $540,000, or 7%.
However, in cases where our manufacturing license grants include a customer acceptance requirement, revenue is recognized over time. 22 Revenue for the years ended December 31, 2024 and 2023 was approximately $135,000 and $550,000, respectively. Our revenue in 2024 consisted of MSTcad licensing and related consulting services revenue, and engineering services revenue from the delivery of MST wafers.
Revenue for the years ended December 31, 2025 and 2024 was approximately $65,000 and $135,000, respectively. Our revenue in 2025 and 2024 consisted of MSTcad licensing and related consulting services revenue, and engineering services revenue from the delivery of MST wafers. Cost of Revenue.
Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $550+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick.
Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick. MST is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry.
The increase in costs was primarily due to an increase in employee-related costs of approximately $136,000 and an increase of approximately $332,000 in patent fees and legal fees associated with our patents. These costs were partially offset by a decrease of approximately $144,000 in stock-based compensation and approximately $90,000 in corporate legal expenses. Selling and marketing expenses.
The increase in costs was primarily due to an increase in stock-based compensation expense of approximately $810,000 and an approximately $114,000 increase in corporate legal fees, partially offset by a decline of approximately $421,000 in employee-related costs.
Our revenue for 2023 consisted of revenue from a manufacturing license. Cost of Revenue. Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide integration engineering services, support for customer installation and qualification and MSTcad support.
Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide integration engineering services, support for customer installation and qualification and MSTcad support. Cost of revenue was approximately $321,000 and $123,000 for the years ended December 31, 2025 and 2024, respectively.
Cost of revenue was approximately $123,000 and $28,000 for the years ended December 31, 2024 and 2023, respectively. We anticipate that our cost of revenue will vary substantially depending on the mix of license and engineering services revenues we receive and the nature of products and/or services delivered in each customer engagement. Operating Expenses.
Cost of revenue is recorded when incurred and may not coincide with the recognition of revenue based on revenue recognition policies and guidance. We anticipate that our cost of revenue will vary substantially depending on the mix of license and engineering services revenues we receive and the nature of products and/or services delivered in each customer engagement. Operating Expenses.
To date, our operations have focused on the research, development, and commercialization of our MST technology and related technologies such as MSTcad. Our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication (including epi tool leases) and metrology of semiconductor wafers incorporating our MST technology.
To date, our operations have focused on the research, development, and commercialization of our MST technology and related technologies such as MSTcad.
During the year ended December 31, 2024, we sold approximately 4.1 million shares at an average price per share of approximately $5.38, resulting in approximately $21.3 million of net proceeds to us after deducting commissions and other offering expenses. Results of Operations for the Years Ended December 31, 2024 and 2023 Revenues.
On February 24, 2026 we closed the Offering, resulting in net proceeds to us of approximately $23.6 million after commissions and expenses. Results of Operations for the Years Ended December 31, 2025 and 2024 Revenues.
Interest income for each period related to interest earned on our cash and cash equivalents and the increase was primarily due to progressively higher interest rates and cash balances during these periods. Accretion income. Accretion income for the years ended December 31, 2024 and 2023 was approximately $178,000 and $283,000, respectively.
Interest income reflects interest earned on our cash, cash equivalents and short-term investments and are impacted by current interest rates and average balances over the periods presented. Accretion income. Accretion income for the years ended December 31, 2025 and 2024 was approximately $6,000 and $178,000, respectively.
During the year ended December 31, 2024, we sold approximately 4.1 million shares pursuant to our ATM at an average price per share of approximately $5.38, resulting in approximately $21.3 million of net proceeds to us after deducting commissions and other offering expenses.
During the year ended December 31, 2025, we sold approximately 1.6 million shares of our common stock pursuant to our 2022 and 2025 ATM facilities at an average price per share of approximately $5.15, resulting in approximately $7.6 million of net proceeds to us after deducting commissions and other offering expenses. 24 We believe that our available working capital as of the date of this report, and after giving effect to our February 2026 registered direct offering, is sufficient to fund our presently forecasted working capital requirements for, at least, the next 24 months following the date of the filing of this report.
Our MSTcad licenses grant customers the right to use MSTcad software to simulate the effects of incorporating MST technology into their semiconductor manufacturing process. MSTcad licenses are granted on a monthly or yearly basis and revenue is recognized over time.
MSTcad licenses are granted on a monthly or yearly basis and revenue is recognized over time.
MST is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry. We believe that by incorporating MST, transistors can be made smaller, with increased speed, reliability and power efficiency.
We believe that by incorporating MST, transistors can be made smaller, with increased speed, reliability and power efficiency. In addition, since MST is an additive and low-cost technology, we believe it can be deployed on an industrial scale, with machines commonly used in semiconductor manufacturing.
For the years ended December 31, 2024 and 2023, we incurred approximately $11.0 million and $12.5 million, respectively, of research and development expense, a decrease of approximately $1.5 million, or 12%. This decrease was primarily due to a decline of approximately $1.6 million in outsourced research and development as we discontinued working with TSI Semiconductor as of January 31, 2024.
Our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication (including epi tool leases) and metrology of semiconductor wafers incorporating our MST technology. 23 For the years ended December 31, 2025 and 2024, we incurred approximately $12.3 million and $11.0 million, respectively, of research and development expense, an increase of approximately $1.3 million, or 12%.
Removed
Our license agreement with ST, which was executed in April 2023, is our first commercial manufacturing and distribution agreement and, assuming successful completion of contractual milestones and payments of associated fees, will entitle us to royalties on all MST-enabled products manufactured for commercial purposes.
Added
Our commercialization strategy is to generate revenue through licensing arrangements whereby foundries, IDMs and fabless semiconductor manufacturers pay us a license fee for their right to use MST technology in the manufacture of silicon wafers as well as a royalty for each silicon wafer or device that incorporates our MST technology.
Removed
Our integration services consist of depositing our MST film on semiconductor wafers, delivering such wafers to customers to finalize building devices, and performing tests for customers evaluating MST.
Added
The 2022 ATM expired on March 18, 2025. 22 On May 27, 2025, we entered into an Equity Distribution Agreement with Craig-Hallum as agent, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock in an “at-the-market” offering to or through the agent, having aggregate offering proceeds of up to $50.0 million (the “2025 ATM”).
Removed
The integration license agreements we have entered into to date grant the licensees the right to build products that integrate our MST technology deposited by us onto their semiconductor wafers, but these agreements do not grant the licensees the rights to manufacture on their site or to sell products incorporating MST.
Added
On February 23, 2026, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering (the “Offering”), an aggregate of 5,000,000 shares of our common stock, at a purchase price of $5.00 per share, for gross proceeds from the Offering of $25 million, before deducting the placement agent fee and estimated offering expenses.
Removed
Our first JDA included the grant of an R&D license to our customer and we were paid for such license upon delivery of our IP transfer package which enabled our customer to install MST in a tool in their facility and to use it to manufacture wafers for internal use.
Added
However, in cases where our R&D license grants include a customer acceptance requirement, revenue is recognized over time. Likewise, we recognize revenue from HVM licenses at the point in time when process qualification is complete because the license to sell MST-enabled products is a right to use the Company’s technology and not a right to access the technology over time.
Removed
This JDA also contained targeted technical specifications that, if met, would result in payment of a success fee to us. Those technical objectives were met and we have collected the success fee.
Added
This increase was primarily due to an increase of approximately $676,000 in outsourced fabrication costs as well as increases of approximately $487,000 in stock-based compensation expenses and approximately $124,000 in employee-related expenses.
Removed
Our license agreement with ST, which we executed in April 2023, was our first full commercial license agreement and provided for grants of a license enabling ST to install MST in a tool in their fab and to manufacture wafers for internal development use only as well as an HVM license granted upon completion of process qualification.
Added
Stock-based compensation expenses increased primarily due to our adoption of performance-based RSUs for executives, which have a higher valuation than time-based RSUs and options which had been our primary type of executive equity compensation issued in 2024. General and administrative expenses. General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel, office-related costs and professional fees.
Removed
The ST license agreement provides for payments of license fees, payable upon reaching milestones for MST installation and acceptance, in the case of the R&D license, and upon reaching process qualification milestones.
Added
Stock-based compensation expenses increased primarily due to an increase in the valuation of performance based RSUs newly issued this year compared to time-based RSUs and options. The decrease in employee-related costs is primarily due to a reduction in executive annual bonus accrual. Selling and marketing expenses.
Removed
After process qualification is complete and associated payments are made, ST will obtain an HVM license and will be required to pay royalties for all products they sell that utilize MST.
Added
On February 24, 2026, we closed on the sale of 5,000,000 shares of our common stock, at a price of $5.00 per share, in a registered direct offering for the net proceeds of approximately $23.6 million after commissions and offering expenses.
Removed
We believe that our available working capital is sufficient to fund our presently forecasted working capital requirements for, at least, the next 12 months following the date of the filing of this report.
Added
The fair value of our RSAs is measured at the market price of our common stock on the measurement date amortized over the vesting period of the award. The fair value of our time-based RSUs is based on the closing price on the day of grant and they vest over zero to four years.
Added
Awards of performance-based restricted stock units we issue have a performance period of one, two and three years with the vesting of each award tranche dependent on our Total Shareholder Return (“TSR”) relative to the TSR of companies in the Russell 2000 Index over that tranche’s performance period.
Added
The fair value for performance-based awards is fixed at the grant date using a Monte Carlo simulation and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of TSR achievement.

Other ATOM 10-K year-over-year comparisons