Atomera Incorporated

We'll begin in just a moment. Hello everyone and welcome to Atomera's second quarter 2026 update call. I'd like to remind everyone that this call and webinar are being recorded and a replay will be available on Atomera's IR website for one year. I'm Mike Bishop with the company's Investor Relations. As in prior quarters, we are using Zoom and we will follow a traditional presentation format with participants in a listen-only mode. We will open with prepared remarks from Scott Bibaud, Atom Air's President and CEO, and Frank Laurencio, Atom Air's CFO. Then we will open the call to questions. If you are joining by telephone, you may follow a slide presentation to accompany our remarks on the events and presentation section of our Investor Relations page on our website. Before we begin, I would like to remind everyone that during today's call, we will make forward-looking statements. These forward statements, whether in prepared remarks or during the Q&A, are subject to risks and uncertainties. These risks and uncertainties are detailed in the risk factor sections of our filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 10-K filed with the SEC on February 24th, 2026. Except as otherwise required by federal securities laws, Adam Mayer disclaims any obligations to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions, and circumstances. Also, please note during this call, we will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is posted on our website. Now, I would like to turn the call over to our President and CEO, Scott Bibaud. Go ahead, Scott.

Thanks, Mike, and good afternoon, everyone. Q2 was a quarter of real momentum. Our customer engagements advanced across each of our target markets. We've had promising signs of new markets developing, and again, we turned a technical breakthrough into the early stages of a genuine commercial pipeline. Today, I'll move through GATE All-Around, our broader customer activity, the growing pull we're seeing in memory, and then I'll spend real time on GAN where I believe we may be witnessing the opening of a significantly new market for Atomera. Let me start with Gate All Around. By now you all know why this technology transition is so important. So I'll go straight to the news. We continue to work with two of the four players in this space and this quarter we passed a significant milestone with one of the two active Gate All Around customers opening the door to further work on their unique silicon structures. These customers typically ask for a sequence of demonstrations before they'll accept a new material into their process flow. So clearing this stage is a meaningful step rather than a formality. It directly answers the manufacturability questions this customer had put in front of us. We remain in active discussions with the other two of our four target GAA customers and our strategic partner continues to provide both the advanced test infrastructure and the ecosystem credibility that enables us to get in the door and helps us to stay there. Memory is an area where interest is clearly accelerating. The large memory manufacturers are under real pressure to add both capacity and performance, and they have the budgets to evaluate options that can help them get there. Up until recently, we had significant interest from DRAM customers focused on our value proposition for planar periphery enhancements. Then suddenly our customer's direction changed. The major underlying factor was that AI demand accelerated and pushed DRAM manufacturers to the vertical scaling era, including 4F squared and 3D DRAM. and other advanced architectures. We can be confident from our interactions, however, that the technical merit of our value proposition for planar periphery is strong. Today, we've established a new value proposition for 4F squared DRAM validated through discussions with multiple customers. We have shown that an MST starting wafer enables a vertical DRAM access transistor to be built using a next generation D-RAM fabrication process that is much cheaper than most of the D-RAM industry is currently pursuing. Our new concept solves fundamental device challenges in 4F² while offering significant cost savings by leveraging MST's precise doping profile control capabilities. In addition to meeting with customers, We have completed a TCAD simulation study demonstrating its feasibility, and the results have been accepted to be presented at an IEEE conference in September. Traditionally, the technology in NAND flash memory's periphery circuit have lagged far behind DRAM, even though NAND memory cells themselves moved to 3D structures many years ago. In the history of Atomera, we have never established a serious value proposition for flash memory. However, that situation may be changing because in the last few weeks, we have learned from a major NAND supplier that AI is now pushing NAND to the point that they need the planar periphery boost that MST can provide. We have spent the last five years perfecting this value proposition for DRAM, and now it is applicable to NAND. If adopted by NAND flash manufacturers, this more than doubles the TAM for MST, which would obviously be very commercially significant. Turning to the rest of our pipeline, our large IDM customer program continues to progress according to plan. We're now at a stage where new device test data is coming in even as the next batch of experiments gets underway. Development efforts are moving fast, and our teams are working closely together. We are also working with other companies and engagements in power, and our trench vet and HBT development continues to advance, aimed squarely at the efficiency and high frequency demands emerging from AI data centers. In RFSOI, wafers are still running with our second JDA partner. and we remain confident they will replicate the positive results we've demonstrated on other customer silicon. Internally, our work on a high throughput manufacturing process for RFSOI, where the substrate supply chain is crucial, is also going well and may be applicable to multiple other applications. RF manufacturers have long relied on the characteristics of RF SOI substrates for switch and LNA performance, but they're also interested in future designs using gallium nitride due to its significant performance advantages, including the potential for fully integrated RF front ends, including power amplifiers. Unfortunately, due to silicon substrate parasitics, GaN RF development has been mostly limited to GAN on silicon carbide, which is a very expensive specialty starting wafer. Which brings me to the exciting news regarding their preferred starting material, GAN on silicon. In our May update call, we shared how MST could help solve parasitic channel problems in GAN on silicon, but we hadn't gotten the RF test results that could completely illustrate MST's effect. Later that month, performance data finally arrived and we announced a technical breakthrough. MSD makes GaN on silicon for RF devices commercially attractive. Our characterization partner InSize has now delivered RF data for MST enabling GaN on silicon that is frankly outstanding. The devices deliver effectively lossless RF together with outstanding harmonic distortion performance leading to exceptional linearity. At the benchmark drive level, linearity is roughly a thousand times better than the GAN on silicon reference. And that improvement remains two to three orders of magnitude across the full sweep of power. We know of no other GAN on silicon substrate that can duplicate these findings. Just as important, These results approach the linearity and loss figures of advanced trap-rich RF SOI, the technology RF designers typically reach for when they need this class of performance. Our partners at Insize independently confirm these benefits on their own world-class baseline, which is exactly the kind of third-party validation customers appreciate. For more details on our GAN on silicon test results, please see the white paper on our website. In June, we took this data to IMS, the International Microwave Symposium, and the results were terrific. Our announcement generated real enthusiasm on the show floor, and as a direct result, we are now working with several new potential customers who want to evaluate MST GaN on silicon in their own designs. Here's why this matters strategically. Because our GaN on silicon results are now approaching RFSOI class performance, but on a low-cost silicon substrate, and with the inherent power and frequency headroom that GaN provides, we believe some designs that would traditionally be built in RF SOI could instead move to GaN on silicon. That would be a meaningful shift in how RF front-end designs get built, and MST's performance may well be the catalyst that sets it in motion. If new RF design activity begins migrating towards GaN on silicon, Atomera would be positioned right at the start of a new high growth market. And it's worth underscoring that MST is the enabler on both sides of that shift. So whichever path a customer chooses, Atomera benefits. To summarize, we cleared a key gate all around milestone, established a new next gen value proposition for DRAM, opened a new front in memory with NAND, kept our pipeline moving across power and RFSOI, and turned our GAN breakthrough into hard RF performance data, real industry enthusiasm and new customers with the potential to seed an entirely new RF market. This is an exciting time to be at Atomera. With that, I'll turn the call over to our CFO, Frank Laurencio to review our financials.

Thank you, Scott. At the close of the market today, we issued a press release announcing our results for the second quarter of 2026. This slide shows our summary financials. Revenue in the second quarter was $158,000 consisting of fees for wafer deliveries to customers, primarily to our large IDM customer. Our gap net loss for the second quarter of 2026 was $6.3 million, or 17 cents per share, compared to a net loss of $5 million, also 17 cents per share, in the second quarter of 2025. On a non-gap basis, our loss for the second quarter was $5 million, compared to a loss of $4 million in the second quarter of 2025. GAAP operating expenses were $6.9 million in the second quarter of 2026, an increase of approximately $1.7 million from $5.2 million in the second quarter of 2025. Stock-based compensation, which is excluded from our non-GAAP results, increased by approximately $463,000 year-over-year and was $1.7 million in the second quarter of 2026 compared to $1.3 million in Q2 2025. In the second quarter of 2026, as compared to the prior year period, non-GAAP R&D expenses increased by $188,000, G&A expenses increased by $828,000, and sales and marketing expenses increased by $225,000. The increase in sales and marketing was mainly due to new executive hires in Q4 2025 and Q1 2026. Turning to our sequential results, second quarter gap operating expenses of $6.9 million compared to $6.2 million in the first quarter of 2026. On a non-gap basis, operating expenses increased sequentially by $350,000 to $5.1 million in the second quarter from $4.8 million in Q1. primarily reflecting higher G&A expense offset partly by lower R&D expenses. These sequential fluctuations largely reflected timing of expenses for IP legal costs in G&A which were heavier in Q2 and outsourced metrology activity in R&D which was more concentrated in Q1. Our balance of cash, cash equivalents, and short-term investments on June 30, 2026 was $38.4 million compared to $41.1 million on March 31, 2026. We used $3.9 million of cash in operating activities in Q2 compared to $4.8 million in Q1 and $3.5 million in Q2 of last year. We did not sell any shares under our ATM during the second quarter of 2026. As of June 30th, 2026, we had 39 million shares outstanding. We believe our current cash, which includes $23.6 million of net proceeds from the registered direct offering we closed in Q1 puts us in a strong position to execute on the opportunities ahead of us. And we will continue to be disciplined about controlling costs. However, we are experiencing cost increases, particularly in our outsourced engineering work. The recent, very rapid growth in the semiconductor industry has tightened supply, and our costs of tool leases, metrology, and device fabrication are going up. On our last two calls, I said we expected 2026 annual non-gap operating expense to be approximately $18.5 million. We budget for a range of plus or minus $250,000 around that number, and we now expect that we will end the year in the high end of that range. With that, let me turn the call back over to Scott for a few summary remarks before we open the call up to questions. Scott?