ATOM

New in FY2025

• 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; · 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.
• 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.
• Neither of our JDAs commits the customers to take MST to production.
• 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.
• 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.
• 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.
• 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.
• The semiconductor industry in 2025 exceeded $700 billion in sales.
• 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.
• 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 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; · 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.
• 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.
• 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.
• 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.
• 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.

Gone since FY2024

• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• The semiconductor industry in 2024 exceeded $550 billion in sales.
• 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 .
• 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 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.

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