Q1 2024 Atomera Inc Earnings Call

Scott A. Bibaud: This unprecedented level of interest in our technology is a result of announced customer commercialization, widespread recognition of the efficacy of our MST technology, and detailed solutions to these issues faced in today's complex transit. I will talk more about customer progress after a short comment on the semiconductor market. This year we see the semiconductor industry modestly growing, led by companies executing in the AI space. The pressure on leading-edge logic clouds to advance their latest nodes with higher performance per watt is intense.

It ended level of interest in our technology as a result of announced customer commercialization widespread recognition of the efficacy of our MST technology and detailed solutions to these issues faced in today's complex transistors.

I will talk more about customer progress after a shortcut in the semiconductor market.

This year, we see the semiconductor industry modestly growing led by companies executing in the AI space the pressure on leading edge logic is to advance their latest nodes with higher performance per watt.

Scott A. Bibaud: Most of the growth in the industry is happening here, as well as in DRAM, snapping back strongly after contracting throughout 2023. In addition, consumer cellular is expected to show modest growth, and automotive, with its associated power and analog component companies, have softened as they work through inventory and see new competition from China, although the consensus seems to be that this outlook for the second half of the year is better. What does all this mean for Anera?

Most of the growth in the industry is happening here.

Yeah.

Snapping back strongly.

Correcting throughout 2023.

And as the consumer cellular.

Automotive with its associated.

Component companies.

A softening.

Inventory and see new competition.

Although consensus.

Outlook.

Better.

Speaker Change: What does that mean.

Scott A. Bibaud: We are a company that benefits from modest capacity utilization at our IDM and foundry customers so they can run R&D wafers. We continue to see this favorable environment for the medium term, except in the bleeding edge where capacity is tight, offset by a strong desire to improve performance, yield, and cost of those new manufacturing processes. Right now, industry dynamics and customer interest indicate a strong willingness to invest. Now, let's review customer activity.

We won't be the benefits.

Okay.

So it can run on day rate, we continue to see this favorable environment.

Except in the bleeding spare capacity is tight.

Strong desire.

Performance yield and cost of.

Manufacturing process.

Speaker Change: Right now industry dynamics.

It's a strong willingness to invest.

All of us.

Speaker Change: Tumor activity.

Scott A. Bibaud: As you know, our first announced customer on track towards production is SC Microelectronics, who are currently incorporating MST into the design of the next generation smart power product. We continue to work closely with them on this effort, and their development progress is on track to a production release which will result in royalty revenue. SmartPAR products belong to the Analog Power and Discrete MEMS and Sensors, or APMS, group, which ST reports publicly

Speaker Change: Thank you all.

Speaker Change: First of all on track towards our SD microelectronics.

Speaker Change: We're currently completing the design of the next generation Smart power products.

Speaker Change: We continue to work closely with them on this effort and the development progress is on track to our external lease which will result in royalty revenue.

Speaker Change: For America <unk>.

Speaker Change: <unk> power products belonged to the analog power.

Speaker Change: Our <unk> group.

Speaker Change: You reported publicly.

Scott A. Bibaud: In their recent earnings announcement, ST reported $2.2 billion in APMS revenue for the first quarter of this year. Thus, the potential of this business is very large. As I've made clear, our first priority as a company is to help ST get the highest possible performance out of MST and to get it into production as quickly as possible. Our next priority is to put other customers on that same path to production, and I believe we're making long strides in that direction.

Speaker Change: In their recent earnings announcement, <unk> reported $2 $2 billion in Atms revenue.

Speaker Change: Sure.

Speaker Change: So the potential of this business is very large.

Speaker Change: As a firm.

Speaker Change: First priority as a company is to help FTE get the highest possible performance.

Speaker Change: Fee and to get it in production as quickly as possible.

Speaker Change: Our next priority, but other customers under that same path to production and I believe we're making long strides in that direction.

Scott A. Bibaud: In the last three months, we have submitted a historically high number of proposals for licenses and JDAs, and these have been for both phase one and phase three customers, although none of them have closed yet, or there would have been an out. We are currently taking a lot more shots on gold than has historically been the case. That said, we still haven't found our way into GEA-1's net.

Speaker Change: Three months, which submitted surgically high number of proposals for licenses and <unk>.

Speaker Change: And these have been for both phase, one and phase III customers.

Speaker Change: Although none of them have closed yet.

Speaker Change: Are they would've been announced we are currently taking a lot more shots on goal.

Speaker Change: Particularly in the case.

Speaker Change: That said, we still haven't found our way to <unk>.

Scott A. Bibaud: We have proven, and they acknowledge, that MST can overcome every challenge they've given us. From past experience, we know the decision by a BU to move forward with MST is often a matter of intersecting with the customer's move to a new process or node. So I believe that our continued discussions with JDA I will ultimately bear fruit. With JDA2, we have gotten our first glimpse at data, and it looks good.

Speaker Change: We have proven and they acknowledge that MST can overcome every challenge they've given us from past experience.

Speaker Change: The decision by <unk> to move forward with MST is a matter of intersecting with the customers move to a new process or node. So I believe that our continued discussions with one will ultimately bear fruit.

Speaker Change: With <unk> two we have gotten our first peek at data and it looks good.

Scott A. Bibaud: Although the full battery of testing has not been completed yet, early results look promising, with Atomera providing significant improvements in some of the customer's most critical requirements. If the final results, including a much wider set of specifications, look equally good, we hope to put a license in place and start development toward production. Likewise, at our previously announced FABLIS licensee, DOE planning and wafer starts are ramping up to determine if MST will be included in their next generation RF products. If so, this would be another large license and royalty opportunity for Atomera, and we believe it would encourage other RFSOI customers to license MST.

Speaker Change: Although the full battery of testing has not been completed early results are promising with Adam are providing significant improvements in some of the customers most critical requirement.

Speaker Change: If the final results, including much wider set of specs look equally good we hope to put up a license in place and start development towards production.

Speaker Change: Likewise at our previously announced Fabless licensee.

Speaker Change: Bo planning and wafer starts ramping up to determinants MSC will be included in our next generation RF products. If so this would be another large license and royalty opportunity for <unk> and we believe it would influence other RF soi customers to license MSG.

Scott A. Bibaud: Our Foundry licensee just completed a new round of MSTCAD and is interested in the possible incorporation into one of their next generation process nodes as well. They're seeking approval to start a new set of wafers as we do. As you can see, each of our licensees is making an effort to incorporate MST into their upcoming technology releases. But we also have proposals out with multiple companies that are not yet licensees. The proposals fall into our four focus areas except one, which is an entirely new high potential area.

Speaker Change: Our foundry licensee just completed a new round of Emmis.

Speaker Change: And just interested in the possible incorporation into one of their next generation process nodes as well.

Speaker Change: Seeking approval to start a new set of wafers as we speak.

Speaker Change: As you can tell each of our licensees is making an effort to incorporate <unk> into their upcoming technology releases.

Speaker Change: But we also have proposals out with multiple companies that have not yet licensed.

Speaker Change: The proposal is fall into our four focus areas, except one which is an entirely new high potential area.

Scott A. Bibaud: During the last quarter, we had substantive discussions about working together with almost all the major companies in the advanced node and memory areas. In the advanced node segment, we are offering a variety of solutions to the challenges of making the incredibly complex gate all around structures used at the bleeding edge. The silicon data and TCAD simulations we are using to validate these solutions are constantly being refined to provide more detail, which is critical to winning these customers. In addition, we continue to secure patents around structures in this quickly evolving area.

Speaker Change: During last quarter, we have had substantive discussions about working together with almost all the major companies in the advanced node and memory area in the advanced node segment, we are offering a variety of solutions to the challenges of making the incredibly complex scalar on structures used at the <unk>.

Speaker Change: The silicon data.

Speaker Change: Stimulations, we are using to validate these solutions are constantly being refined.

Speaker Change: To provide more detail, which is critical to winning these customers.

Speaker Change: In addition, we continue to secure patents around structures in this quickly evolving area.

Scott A. Bibaud: As an example, just this week, we were notified that our patent titled Gate All-Around Device, including a super lattice, has been allowed and will formally issue next month. In memory, we are focusing on providing performance upgrades to DRAM to meet the needs of AI while still delivering on the cost requirements that dominate this segment. It's a tricky balance, but in memories, MST not only improves performance.

Speaker Change: As an example, just this week, we were notified that our patent titled Gate, all around device, including a super lattice has been allowed and will formally issued.

Speaker Change: In memory, we are focusing on providing performance upgrades to DRAM.

Speaker Change: Needs, while still delivering on cost requirements to dominate the second line.

Speaker Change: Yeah.

Speaker Change: But in memories MSC not only improves performance.

Scott A. Bibaud: But it can also lower the cost of the chip itself, making the cost-benefit analysis very favorable. In the RFSOI segment, we have customers who are running or planning to run wafers at most of the largest manufacturers, and our collaborations with major players in the power semiconductor space also continue. I do understand investors' frustration that all the good work happening inside is not generating business announcements on the outside. We believe that will happen in time.

Speaker Change: But it also can lower the cost of the chip itself, making the call today.

Speaker Change: Now I'll just very favorable.

Speaker Change: In the RF segment, we have customers who are running on plan.

Speaker Change: To run wafers that most of the largest manufacturers.

Speaker Change: And our collaborations with major players in the power station.

Speaker Change: All teams.

Speaker Change: I do understand investors' frustration and all the good work happening inside has not generated business and so on the upside.

Speaker Change: We believe that will happen in time.

Scott A. Bibaud: Our focus has been on making these proposals turn into revenue, and I think we're making good progress. We expect to make announcements in the coming quarters on several of these areas. Before I bring this presentation to a close, I want to let you know about a market segment that represents an entirely new source of IP-protected potential revenue for Atomera beyond our main channel of business. As part of our ongoing R&D, we have developed new variations of our silicon lattice films, which have opened additional potential for us in the fast-growing sector of compound semiconductors.

Speaker Change: Focus has been on making these proposals turned into revenue and I think we're making good progress.

Speaker Change: We expect to make.

Speaker Change: And several of these days.

Speaker Change: Following this presentation to a close I want to let you know about our markets.

Speaker Change: Direly new sources of IP protected potential revenue for MRM beyond our main channel businesses.

Speaker Change: As part of our ongoing R&D, we have developed new variations.

Speaker Change: Whichever.

Speaker Change: Potential for us in the fast growing sector.

Speaker Change: Compound semiconductors.

Scott A. Bibaud: We are exploring a number of potential applications, including those involving silicon carbide, gallium nitride, silicon germanium, and other compounds that could have applications in enhancing AI chips and quantum computing. I will highlight just one we are working on. Gallium nitride, or GAN, is a wide bandgap material that can be used to produce devices capable of operating at higher temperatures, frequencies, and voltages than those based on pure silica. The market for GaN and power electronics is growing rapidly, dominated by mobile and consumer applications, and with a very bright future in automotive.

Speaker Change: Eric.

Speaker Change: Applications, including those in Silicon carbide.

Speaker Change: Japan and other compounds that could have applications in.

Speaker Change: And enhancing AI chips and quantum computing.

Speaker Change: I would highlight just one week.

Speaker Change: Gallium nitride or Gan, which has a wide bandgap materials that can be used to produce devices capable of operating at a high.

Speaker Change: Yes.

Speaker Change: You can see and voltages and those based on pure silicon.

The market for Gan and power electronics is growing rapidly dominated by mobile and consumer applications.

Great future.

Scott A. Bibaud: Many of you may recently have switched to a much smaller, faster wall charger, and that was likely enabled by GAN. A recent report by the Yule Group said that the power aggregation market grew by 41% in 2023 and will likely increase at a CAGR of 46% over the next five years, potentially exceeding $2 billion per year by 2028. Compound semiconductor materials have traditionally been difficult to manufacture due to crystal deformation, some of which can be caused by mismatch with non-native substrates.

Speaker Change: <unk>.

Scott A. Bibaud: Many of you may recently have switched to a much smaller faster wall charter and that was likely enabled by <unk>.

Speaker Change: But the yield.

Speaker Change: Gas market.

Speaker Change: We wanted to.

Speaker Change: In 2023 and will likely increase at a CAGR of 40.

Speaker Change: 6% over the next five years potentially exceeding $1 billion per year by 2028.

Speaker Change: Semiconductor materials have traditionally been difficult to manufacture.

Scott A. Bibaud: Some of which can be caused by mismatch with non <unk> substrate.

Scott A. Bibaud: The mismatch creates stresses at the interface, which propagate through the wafer, causing cracks and other defects that have limited both the size and the yield of wafers, making economical manufacturing difficult. Atomera's MST film can relax or de-strain the interface between two different crystal lattices.

Scott A. Bibaud: The mismatch create stresses that interface, which propagate through the wafer, causing cracks and other taxes.

Speaker Change: Both the size and the yield of wafers, making economical manufacturing difficult.

Scott A. Bibaud: <unk> MST film can relax R&D strain the interface between two different crystal edge systems, and we've been filing a number of patents over the years related to this effect.

Scott A. Bibaud: And we've been filing a number of patents over the years related to this effect. Recently, we began working with one of the world's leading authorities in compound semiconductor fabrication, Professor Edwin Piner at Texas State University, to investigate how MST could help solve this thorny manufacturing problem. A material that can significantly improve the quality of gain weavers and potentially enable them to be manufactured at a larger size is a game changer that the industry is currently seeking. Early experiments growing GAN wafers using MST have shown very promising results.

Speaker Change: Recently, we began working with one of the world's leading authorities in compound semiconductor fabrication Professor Edwin Pinar at Texas State University to investigate.

Speaker Change: He could have thought sorry.

Speaker Change: Okay.

Speaker Change: I'm sorry.

Speaker Change: Thanks again.

Speaker Change: And potentially enable them to be manufactured at a larger size is a game changer.

Speaker Change: Okay.

Scott A. Bibaud: We experienced growing Gan wafers.

Scott A. Bibaud: While we still have work to do, if our current trajectory continues, we should be able to enter the market and generate revenue much more quickly than in our traditional engagements with semiconductor customers, potentially even before the end of this year. There's a lot going on at Atomera these days. In addition to all the customer commercial activity and the potential expansion into the compound semiconductor space, we have been evaluating a large number of potential R&D foundry partners, recruiting new marketing talent, working on some critical partnerships, and becoming more active in the Chips and Sciences Act.

Speaker Change: He has shown very promising results.

Speaker Change: Well, we still have work to do.

Speaker Change: Our current trajectory continues you should be able to enter the market.

Speaker Change: Revenue much more quickly than in our original engagement.

Speaker Change: With semiconductor customers.

Speaker Change: Good.

Speaker Change: This year.

Speaker Change: There's a lot happening at <unk> stage and additional customer commercial <unk>.

Speaker Change: Expansion into the company.

Speaker Change: For space, we have been evaluating a large number of potential RMB foundry partners recruiting new marketing talent.

Scott A. Bibaud: Working on some critical partnerships and becoming more active.

Scott A. Bibaud: We are very optimistic about the prospects opening before us, any one of which could take us over the top as a company. Our e-learning engagement has the potential to form the base of revenue for our company, and each of the areas I've outlined can grow on top of that base. Compound semiconductors would represent a new segment for us, one with a much faster time-to-revenues, while our traditional business continues to have a massive TAM rich with opportunities for MST.

Speaker Change: <unk>.

Scott A. Bibaud: We are very optimistic about prospects opened before us any one of which could take just over the top as a company our <unk> engagement.

Speaker Change: The base of revenue.

Speaker Change: And each of the areas outlined can grow on top of that space.

Scott A. Bibaud: Compound semiconductors represent a new segment for US one was much faster time to revenues.

Speaker Change: While our traditional business continues to have a massive tam rich with opportunities for MSG.

Scott A. Bibaud: Although advancing on many fronts, our team remains laser focused on converting these excellent prospects into licenses that will make Atomera into a profitable and diversified technology leader in the semiconductor industry. Thanks for taking the journey with us.

Speaker Change: Although our advancing on many fronts. Our team remains laser focused on converting these excellent prospects into licenses that will make Adam era into a profitable diverse technology leader in the semi Doctor District.

Frank: Now Frank will review our financials. Thank you, Scott. At the close of the market today, we issued a press release announcing our results for the first quarter of 2024, and this slide shows our summary financial results. Our gap net loss for the three months ended March 31, 2020, was $4.8 million or $0.19 per share compared to a net loss of $5 million or $0.21 per share in the first quarter of 2023. In Q4 of 2023, our gap net loss was $4.6 million, which was $0.18 per share.

Speaker Change: Thanks for taking it.

Speaker Change: Now we will review our financials.

Speaker Change: Thank you Todd.

Frank: At close of the market today, we issued a press release announcing our results for the first quarter of 2024 and this slide shows our summary financials.

Speaker Change: Our GAAP net loss for the three months ended March 31.

Speaker Change: Okay.

Speaker Change: Four was $408 million or <unk> 19 per share compared to net loss of $5 million for.

Speaker Change: <unk> per share in the first quarter 2023.

Speaker Change: In Q4 of 2023, our GAAP net loss was $4 6 million, which.

Frank: Revenues were $18,000 in Q1 of 2024 compared to $550,000 in Q4 and $0 in Q1 of 2023. GAAP operating expenses were $5 million in Q1 of 2024, which was a decrease of approximately $148,000 from $5.2 million of OPEX in Q1 of 2023. This decrease in operating expense was mainly due to a $178,000 decline in R&D expenses, reflecting the closure of our outsourced foundry, TSI Semiconductor, at the end of January. General and administrative expenses increased by $69,000, and sales and marketing expenses decreased by $39,000.

Speaker Change: Which was <unk> 18 per share.

Speaker Change: Revenue of our $18000 in Q1 of 2024 compared to 550.

Speaker Change: In Q4 and zero in Q1 of 2023.

Speaker Change: GAAP operating expenses were $5 in Q1 of 2024, which was a decrease of approximately $148000 from $5 $2 million of Opex.

Speaker Change: Q1 'twenty three.

Speaker Change: This decrease in operating expense was mainly due to a $178000 decline in R&D expenses.

Frank: Reflecting the closure of our out of our outsourced foundry seismic conductor at the end of June.

Frank: General and administrative expenses increased by $69000 and sales and marketing.

Frank: sequentially, our GAAP operating expenses decreased by $300,000 from Q4 2023 to $5 million in Q1, reflecting a $134,000 decrease in R&D expenses, also due to the R&D closure, a decline of $102,000 in sales and marketing expense due to a lower head count, and G&A expense declining by $64,000. The non-GAAP net loss in Q1 2024 was $4 million and compares to a loss of $4.2 million in Q1 2023. And, as with our GAAP results, this was primarily due to lower R&D expenses. sequentially, the non-GAAP net loss increased by $228,000 from $3.8 million in Q4, as lower revenues were partly offset by a decline in operating income.

Frank: Increased.

Speaker Change: Nine.

Speaker Change: Sequentially.

Speaker Change: Our GAAP operating expenses decreased by $300000 from Q4 2020.

Speaker Change: To $5 million in Q1, reflecting a $134000.

Speaker Change: The decrease in R&D expenses also due to the RMB.

Speaker Change: Okay.

Speaker Change: Decline of $102000 in sales and marketing expense due to lower head count.

Speaker Change: And G&A expense declining by $64000.

Speaker Change: non-GAAP net loss in Q1, 2024 was $4 million.

Speaker Change: In Paris to a loss of $4 2 million in Q1, 2023, and as with our GAAP results. This was primarily due to lower R&D expenses.

Frank: Sequentially.

Speaker Change: Yes up net loss increased by $228000 from $3 8 million.

Frank: Four as lower revenues were partly offset by the decline in operating expenses.

Frank: The differences between GAAP and non-GAAP operating expenses in all periods presented are primarily due to non-cash stock compensation expenses, which were approximately $1 million in both Q1 of 2024 and in Q4 2023 and compares to $927,000 in Q1 of 2023. Our balance of cash, cash equivalents, and short-term investments on March 31st, 2024 was $19.3 million, compared to $19.5 million at the end of 20 During Q1 2024, we used $4.1 million of cash in operating activities, and we sold approximately 510,000 shares under our ATM facility at an average price per share of $8.06, resulting in net proceeds of approximately $4 million. First quarter operating cash flow also includes the collection of $550,000 of fees invoiced after meeting a key milestone in Q4 under our commercial license. As of March 31, 2024, we had 26.9 million shares outstanding.

Speaker Change: The differences between GAAP and non-GAAP operating expenses in all periods presented are primarily due to noncash stock compensation expenses.

Frank: Which were approximately $1 million in both Q1 24.

Speaker Change: And in Q4 2023.

Speaker Change: And compares to $900.

Frank: In Q1 of 2023.

Speaker Change: Our balance of cash cash equivalents and short term investments on March 30.

Frank: 24 was $19 $3 million.

Frank: Compared to $19 5 million at the end of 2020.

Speaker Change: During Q1 2044.

Speaker Change: One 1 million.

Speaker Change: Cash and operating activities and we sold approximately 510000 shares.

Speaker Change: Under our ATM facility at an average price per share of $8 six.

Speaker Change: Resulting in net proceeds of approximately $4 million.

Speaker Change: First quarter operating cash flow includes the collection of $550000 of stabilized after being a key milestone in Q4.

Speaker Change: Good morning.

Speaker Change: As of March 31, 24, we had $26 9 million shares.

Frank: Revenue in Q1 was approximately $18,000 and consisted of recognizing three months of revenue under the MST CAD license to a large semiconductor manufacturer that we announced last quarter. We expect to recognize approximately that same $18,000 of MSTCAB license revenue from this customer for the remainder of 2024. For Q2, we expect our total revenue will be approximately $50,000, consisting of the MSTCAD license and engineering services. As I stated in our call last quarter, the next major revenue milestone under our agreement with STE will be the grant of the distribution license upon completion of the qualification process, which is largely under ST's control.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: Revenue in Q1 was approximately $80000 and congestion.

Speaker Change: Rising three months of revenue under the MST CAD license to a large semiconductor manufacturer that we announced last quarter.

Speaker Change: We expect to recognize approximately the same $18000 of MSG <unk> license revenue.

Speaker Change: For this customer for the remainder of 2024.

Speaker Change: For Q2 in fact, our total worldview.

Speaker Change: Possibly.

Speaker Change: The <unk> license engineering services.

Speaker Change: As I stated in our call last quarter and estimated milestone under our agreement with <unk> will be the rest of the distribution license upon completion of the qualification process, which was largely under SG&A goal.

Frank: So I cannot provide guidance on the timing of recognizing that revenue. Moving to our expense guidance, given the lower operating expenses in Q1 due to lower outsourced R&D spending, which will not ramp back up until we have a replacement for TSI, I am reducing our full year guidance for non-GAAP operating expenses to a range of $16.5 to $17.25 million.

Frank: So I cannot provide guidance on the timing for recognizing that.

Speaker Change: Moving to our expense guidance, given the lower operating expenses in Q1.

Frank: Due to lower <unk>.

Frank: R&D spending which will not ramp back up until we have a replacement from tsi.

Frank: I am reducing our full year guidance for non-GAAP operating expenses to a range of 16 five to $17.

Scott A. Bibaud: We also expect to add several headcounts this year in sales and marketing and engineering, and our expense guidance reflects the impact of those planned new hires. [inaudible] I'll turn the call back over to Scott for a few summary remarks before we open up the call to questions. Scott?

Speaker Change: Sure.

Speaker Change: We also expect to add several head count this year in sales marketing and engineering.

Speaker Change: Guidance reflects the impact of those claims.

Speaker Change: <unk>.

Scott A. Bibaud: Okay.

Speaker Change: I'll turn the call back over to Scott.

Scott A. Bibaud: Before we open up the call for questions.

Scott A. Bibaud: Thank you, Frank. I'm proud of the progress we've made in the last quarter, and I hope you get a sense of the momentum we have underway, both in development and in new production opportunities. Our team is confident that it's only a matter of time before we can announce licensed deals that will further solidify the potential of Atomera's business for the future. In addition, it is great to give you a peek at our early compound semiconductor work, which could form a whole new revenue stream for the company. We are doing everything in our power to get SE to production quickly, while simultaneously building a diversified, sustained business around that first deal. Thanks, as always, for your support.

Scott A. Bibaud: Scott.

Scott: Thank you Brian.

Scott: Hi, Brian.

Scott A. Bibaud: The last quarter.

Scott A. Bibaud: The momentum we have underway, both in development and new production opportunities.

Scott A. Bibaud: Our team is confident that its only a matter of time before we can announce license deals that will further solidify the <unk>.

Scott A. Bibaud: <unk> business for the future in addition.

Scott A. Bibaud: <unk>.

Scott A. Bibaud: Cemetery to work, which pharma revenue stream that's coming.

Scott A. Bibaud: We are doing everything in our power to get <unk> production quickly while simultaneously building a diversified sustained business around that first deal.

Mike Bishop: Mike, we can now take questions. Okay, thank you, Scott. If you wish to ask a question, please click the Q&A button at the bottom of the Zoom window, then feel free to type in your question. I will do my best to aggregate the incoming queries and relay them to management. Alternatively, you can click the raise your hand button, and we may call on you to ask your question live. And right now, our first question comes from Richard Shannon of Craig Hallam. Richard, if you would kindly unmute and turn on your camera; it's already on.

Speaker Change: Thanks as always for your support Mike We can now take questions.

Richard Cutts Shannon: Thank you Scott.

Speaker Change: If I could ask a question. Please click the Q&A at the bottom of zoom windows.

Mike Bishop: Type in your question.

Speaker Change: Aggregate income inquiries related to managing Alternatively.

Mike Bishop: Alternatively, you can click the raise hand button and we may call on you to ask your question.

Speaker Change: And right now our first question comes from Richard Shannon of Craig Hallum, Richard If you would come in and mute and turn on your camera, it's already on great.

Richard Cutts Shannon: Great. You may begin. All right, Mike, can you hear me?

Mike Bishop: Yep. Excellent. Hi Scott and Frank, thanks for taking my questions. I guess maybe I'll ask the first one here on kind of a new, I know the new language you've been using here and you put it in your press release as well, but regarding proposals, a record number of proposals this quarter versus last. I guess just to understand the significance of this, to what degree are these proposals kind of a push mechanism for you versus a pull mechanism from your customers to kind of get an understanding of true demand here and interest? How do we take that?

Richard Cutts Shannon: You may begin alright.

Speaker Change: Alright, Mike can you hear me yes.

Scott: Excellent.

Richard Cutts Shannon: Hi, Scott and Frank Thanks for taking my questions.

Richard Cutts Shannon: I guess, maybe I'll ask the first one here on kind of a new a new.

Richard Cutts Shannon: New language, you've been using here and if we put it in your press release as well, but regarding proposals.

Mike Bishop: A record number of proposals. This this quarter versus last I guess to understand the significance of this so once you get these proposals kind of a.

Scott: Push mechanism for you versus a pull mechanism from your customers since you've kind of been understanding of of true demand here and interest how do we take that yes, Mike I'm glad you asked that question because.

Scott A. Bibaud: Yeah, Mike, I'm glad you asked that question because it's important to understand we don't push proposals out. We don't just generate proposals and send them to people. The only time we make a proposal is when we've gone far enough down the road with the customer in our work that they are interested in receiving a proposal from us. Of course, we do share.

Scott A. Bibaud: It's important to understand we don't push proposals out don't just generate incentives.

Scott A. Bibaud: The only time, we make a proposal.

Scott: Far enough down the road with the customer in our work that they are interested in receiving of our kozel from us of course, we share it.

Scott A. Bibaud: We share budgetary ideas about what doing business will allow us to do from the very first day, but creating a proposal term sheet and everything around that is a lot of work. And what we're talking about is that type of proposal, not just a speculative, send it out and hope they respond to it, type of thing. Okay, that's helpful. Just want to make sure about that. And then any kind of, you know, sweet spot of technology areas that these proposals are going out on? Is it a different mix than what you've had in the past?

Scott: We share budgetary ideas about what doing business with us will be from the very first day, but creating a proposal a term sheet.

Scott: Everything around that is a lot of work and what we're talking about is that type of proposal not just a.

Scott A. Bibaud: Speculative send it out and hope they respond to it type of thing.

Scott A. Bibaud: Okay. That's helpful. Just want to make sure on that and then any kind of.

Scott A. Bibaud: Sweet spot of AV technology areas that are.

Scott A. Bibaud: Were these proposals are going out on <unk>.

Scott A. Bibaud: I mean, obviously, we've talked a lot about RFSOI and power. No, I think I talked a little bit about it in my script, but the proposals are going out in almost all of our focused areas. Yeah, I would say all of our focused areas, and, in addition, one other area that we haven't talked about before, as in something we've done a lot of work on so far, but it's something that we have been hoping to enter for some time, so it has good potential. Okay, that's helpful. Let's hear a question or two on ST-micro here.

Scott A. Bibaud: Is it a different mix than what you've had in the past I mean, obviously, we've talked a lot about RF soi and power.

Scott: I think I talked a little bit about it in my script, but.

Scott: The proposals are going out in almost all of our focus areas.

Speaker Change: Yes, I would say.

Speaker Change: Focus areas and.

Scott: In addition, and one other area that we haven't talked about before is simply something.

Scott: We've done a lot of work and so far but it's something that we have been hoping to enter for some time. So it has good potential.

Speaker Change: Okay. That's helpful. Let's see your question or two on an S. T. Micro here you talked about I think the last couple of quarters about.

Scott A. Bibaud: You talked about, I think, in the last couple quarters about one of the next major steps here being getting a PDK frozen. Is this something you have visibility into from ST-micro and any expectations or timing for that? Um, yeah, I think. We definitely have a view into their development process, but we don't have a very clear view into their exact schedule.

Scott A. Bibaud: And what are the next major steps here is getting a PDK frozen is just something in visibility into from SG micron have an expectations of timing for that.

Speaker Change: Yeah I think.

Scott A. Bibaud: We definitely have a view of their development process, we don't have.

Scott A. Bibaud: And if we did, they've asked us not to share that publicly. So we won't be, and we won't provide guidance on exactly when those things get done. But I can tell you that we're on track when we share. In prior presentations, kind of a timeline and the process, like we had some graphics that were showing the process. That's a standard process that people would use in the industry, kind of a standard timeline.

Speaker Change: Very clear view into their exact schedule.

Scott A. Bibaud: And if we did they've asked us not to share that publicly.

Scott A. Bibaud: Yeah.

Scott A. Bibaud: The.

Scott A. Bibaud: Guidance on exactly when those things get done.

Speaker Change: But but.

Scott A. Bibaud: But I can tell you that we're on track.

Scott A. Bibaud: When we ship.

Scott A. Bibaud: In prior presentations kind of a timeline the process like we have some graphics for showing the product. That's a standard process that put us in the industry kind of a standard timeline I still think that thats very reasonable.

Scott A. Bibaud: I still think that that's very reasonable. And, you know, one thing that both we and SD have agreed that we can say is that we're on track to that process. Okay, all right. Fair enough, then. Scott, I probably missed writing down the exact language you had on the topic of RFSOI, but I think it said something along the lines of you're running wafers at most of the manufacturers out there. Maybe if you could repeat that passage and then help us understand the point of that comment.

Scott A. Bibaud: And.

Scott A. Bibaud: And no one thing that both we and <unk> agreed that we can say is that we're on track to that process.

Speaker Change: Okay, all right fair enough.

Scott A. Bibaud: Scott I probably missed.

Scott A. Bibaud: Writing down the exact language you had.

Scott A. Bibaud: Topic.

Scott A. Bibaud: Our soi, but I think you said something along the lines of you running.

Scott A. Bibaud: Wafers that most of the manufacturers out there maybe if you can thats right that passage and then help us understand the point of that comment.

Scott A. Bibaud: Yeah, so the RFSOI market has got a certain amount of manufacturers that really constitute the bulk of the capacity that's available in the industry. And today we're working with, you know, the vast majority of them, and starting wafers with a lot of them. Okay. Okay, fair enough then. Let's jump over to the large analog player for which you've got a license for MSTCAD here.

Scott A. Bibaud: Yes.

Scott A. Bibaud: The <unk> market has got a certain amount of manufacturers that that really constitute the bulk of the capacity that's available in the industry.

Speaker Change: And today, we're working with the vast majority of them and starting wafers with a lot of them.

Scott A. Bibaud: Okay.

Speaker Change: Okay fair enough.

Speaker Change: Let's jump over to the large analog player for which you've got a license for MSG cat here.

Scott A. Bibaud: I guess just what do you kind of see as the outcome for this work? I think Frank mentioned expecting a license, and generating license revenues throughout this year. I'm not sure if that implies stopping after that point.

Scott A. Bibaud: I guess, just what do you what do you see Tennessee is the outcome for this work I think Frank mentioned is that getting a license.

Scott A. Bibaud: But what do you expect to be the outcome or hoped-for outcome here and when will that happen? Does Frank's comment about revenues lasting through this year imply it's not going into next year? And is that the, you know, an endpoint of the work, or do you just want to correlate those two comments under the dynamics there? Okay, I apologize if that was a little confusing. So you know, just like our MST CAD tools, we license them to customers just like Cadence or Synopsis would license their tools to customers.

Scott A. Bibaud: General license revenues throughout this year I'm not sure if that implies stopping after that point, but what do you expect to be the outcome or hoped outcome here and what happened in <unk>.

Speaker Change: Does the Frank's comments about revenues last thing through as you implied not going into next year and is that the.

Scott A. Bibaud: And end point of the work or just want to correlate those two comments understand the dynamics there.

Speaker Change: Okay, I apologize if that was a little confusing.

Scott A. Bibaud: Our our MST CAD tools, we license to customers, just like cadence or synopsys with license their tools to customers.

Scott A. Bibaud: [inaudible] In this case, we have this customer who has signed up for a one-year license with it. It doesn't mean they're going to stop at the end of the year. It just means that that is a contract that we have in place that would be extended as we get closer. Just like most, you know.

Scott A. Bibaud: In this case, we have this.

Speaker Change: This customer who has signed up.

Speaker Change: Thank you.

Scott A. Bibaud: Your license and it doesn't mean, they're going to stop at the end of the year. Just means that that is a contract that we have in place that would be extended as we got closer to us like most.

Scott A. Bibaud: Simulation Model Licenses. [inaudible] And what does that mean? Well, what it means is, uh, this large customer is doing work on their next generation process, and they're adding MST to see if that makes sense for them. And they're adding it in at the simulation level. And so then, you know, it's easy for them to try a bunch of different things.

Scott A. Bibaud: Yes.

Scott A. Bibaud: Simulation model licenses.

Scott A. Bibaud: Hum.

Scott A. Bibaud: And what does that mean well what it means is.

Scott A. Bibaud: Uh huh.

Scott A. Bibaud: This large customer is doing with their next generation processes.

Scott A. Bibaud: And they are.

Scott A. Bibaud: They are adding in <unk> to see if that makes sense for them and theyre, adding it in at the escalation level.

Scott A. Bibaud: We can give them advice on different ways of integrating to get different levels of performance improvement. And when they have seen results that they think they like, then our next goal would be to get them to take an installation, a manufacturing license, and install it in their fab and actually start running wafers inside their own fab. They could actually do demos with us, where they start, send us wafers, and then they run wafers in their fab, but we'd be really encouraging them to do it. So that TCAD license is kind of a first step in that. I got it.

Scott A. Bibaud: And so then it's easy for them to try a bunch of different things that can give them advice on different ways of integrating to get different levels.

Scott A. Bibaud: Performance improvement and when they have seen results that they think they like then our next goal would be to get them to.

Scott A. Bibaud: Take our installation a manufacturing license and install it in the fab and actually start running wafers inside their own they could actually do demos with us.

Scott A. Bibaud: Were they.

Scott A. Bibaud: Send us wafers and then they run.

Scott A. Bibaud: He doesn't have that but we'd really encouraging them to install so that.

Scott A. Bibaud: Okay, that's helpful. Maybe moving over to the first GADA partner here. It's obviously been in place for, I can't remember how many, two or three years now. And I think last quarter you talked about some strong engagement that was slowed down by the holidays. And you seem to, I can't remember the exact language here. I'm looking at my notes here.

Scott A. Bibaud: So that <unk> licensed kind of a first step in that direction.

Speaker Change: Got it okay. That's helpful.

Scott A. Bibaud: Maybe moving over to the first GDA partners. It's obviously been in place for I can't remember how many years.

Scott A. Bibaud: Two or three years I think.

Scott A. Bibaud: Last quarter, you talked about some some strong engagement was slowed down by the holidays and you seem to.

Scott A. Bibaud: Sounds like there's some strong interest from business units here, but no decision yet. Maybe give us some sense here of, is there some back and forth and more iterations happening that you weren't expecting? Or maybe just kind of help us out relative to what sounded like you were getting fairly close to a next step several months ago. Yeah, yeah, I think. It's a very frustrating situation.

Speaker Change: Remember exact language here I'm looking at my notes here.

Scott A. Bibaud: It sounds like some strong interest from from business units here, but no decision made.

Scott A. Bibaud: Maybe give us some sense here of some.

Scott A. Bibaud: This is some back and forth and more iterations, putting that you werent expecting board.

Scott A. Bibaud: Okay.

Scott A. Bibaud: So what we're.

Scott A. Bibaud: We're getting fairly close to a next step.

Scott A. Bibaud: Several months ago.

Scott A. Bibaud: We did a JDA with these guys a couple years ago. They gave us a set of specifications. We met all of those specifications. And so then they said, OK, we're going to present this to our business units to consider adopting it. We have been working with a number of their business units, and last year, they gave us a whole bunch of other tests and specifications that they wanted us to run wafers for and do simulations to prove that we could solve them. And we did, uh, by the end of last year, pretty much provided all of that test data they reviewed; they agreed that we had met all of it.

Scott A. Bibaud: Yeah.

Speaker Change: It's a very frustrating situation.

Scott A. Bibaud: He did a J D.

Scott A. Bibaud: A couple of years ago.

Scott A. Bibaud: Gave us a satisfactory occasions, we met all of the specifications and then he said okay. We're going to present this to our business units to.

Scott A. Bibaud: Consider adopting we have been working with a number of business units.

Scott A. Bibaud: And last year, they give us a whole bunch of other tests that they wanted to do.

Scott A. Bibaud: When wafers and do simulations proves that we could.

Scott A. Bibaud: Solve them and we did.

Scott A. Bibaud: And so now we're in this very frustrating phase where they're saying, your stuff seems to work well, but until we uh kind of identify the timing when we're going to make a change to that particular area, then we'll decide whether we're going to adopt it or not and do a license. And so we've been going back and forth with them on this for months. It may, I think there may be an impression because we can't give many updates on it that we're not doing, but we literally are talking to these guys constantly. And right now, we just haven't gotten to the point where we can announce that we have an agreement. Yeah, it's frustrating for us.

Scott A. Bibaud: By the end of last year, we pretty much provided all of that is do they review. They agreed that we had met all of it and so now we are in this very frustrating phase where they are saying to us.

Scott A. Bibaud: Seems to work well, but.

Scott A. Bibaud: And Tobey.

Scott A. Bibaud: Kind of identify the timing when we're going to make a change that particular area.

Scott A. Bibaud: And then we'll decide whether we're going to adopt.

Scott A. Bibaud: And so we've been going back and forth with them on this for months.

Scott A. Bibaud: It may I think there may be an impression because we.

Scott A. Bibaud: Can't give any updates on that.

Scott A. Bibaud: But we literally are talking to these guys constantly.

Scott A. Bibaud: And right now we just haven't gotten to the point, where we can announce that we have an agreement so.

Scott A. Bibaud: And I'm sure it's very frustrating for investors. It looks like we're not doing anything. We are doing a lot. We just haven't gotten it over the finish line.

Scott A. Bibaud: Yes, it's frustrating for us and I'm sure, it's very frustrating for investors. It looks like we're not doing anything we're doing a lot. We just haven't gotten it over the finish line.

Scott A. Bibaud: And, you know, I don't think that's that unusual. If you look back at our ST micro engagement, we really, by I think 2020, we had shown them all the data that they needed to do an installation and get started. And it wasn't until 2023 that they finally got a license with us and got started on that. So to a certain extent, you have to be prepared and sitting on the shelf when they're ready to grab something off the shelf and put it into place.

Scott A. Bibaud: And I don't think Thats that unusual if you look back at our SD micro engagement.

Scott A. Bibaud: Really by I think 2020, we had shown them all the data that we needed to do installation and get started and it wasn't until 2023 that they finally, the license less and got started on that too.

Scott A. Bibaud: To a certain extent.

Scott A. Bibaud: You have to be <unk>.

Scott A. Bibaud: Prepared and sitting on the shelf when theyre ready to grab something off the shelf and put them into place.

Scott A. Bibaud: Okay, fair enough. And typically, when we do a license with a customer, we ask them to pay an upfront license fee when we stop time. So if you're going to need to use the technology in a year, why would you buy a license right away, right? That might be a little bit of a holdup as well. Okay, fair enough. You know, I will jump out of line here but probably will come back in.

Scott A. Bibaud: Okay Fair enough and just one last question, we typically when we do a license with the customer we ask them to pay an upfront license fee.

Scott A. Bibaud: When we bought them.

Scott A. Bibaud: Yes.

Scott A. Bibaud: So if you're going to need to do use of technology in a year.

Scott A. Bibaud: Why would you do a license right away right.

Scott A. Bibaud: So.

Scott A. Bibaud: That might be a little bit of a hold up as well.

Scott A. Bibaud: But thanks for all the details, Scott. Okay. Okay, Richard, thank you. Looking at some of the questions coming in on the Q&A chat, the first one regards ST Micro, which is when ST makes the next milestone, what will the scale of fees that Atomera receive?

Scott A. Bibaud: Okay.

Speaker Change: Okay fair enough. So I will jump out of line here, but probably come back in but thanks for all the detail Scott.

Scott A. Bibaud: Okay.

Richard: Okay, Richard Thank you.

Scott A. Bibaud: Looking at some of the questions coming in on the Q&A chat.

Scott A. Bibaud: The first one regards to FTE metric.

Scott A. Bibaud: Which is when he.

Scott A. Bibaud: It makes the next milestone what will the scale of fees that Adam are well received.

Scott A. Bibaud: Yeah, we've said, you know, since the time that we signed and announced the signature of the deal that it was consistent with our model for licensing to customers. And we expect, you know, the total fees to be, you know, in the neighborhood of $3 million for all stages of licensing. And this is consistent with that.

Scott A. Bibaud: Okay.

Speaker Change: Yes, we've said.

Scott A. Bibaud: Since the time that we signed and announced the signature of the deal that it was a consistent with.

Speaker Change: Oh boy licensing to customers and we expect.

Scott A. Bibaud: The total fees to be in the neighborhood of $3 million.

Scott A. Bibaud: So, you can do the math based on the revenue recognized already, which was $550,000 last quarter and $150,000 that we had recognized originally when we did the integration license with them several years ago. So this is pretty significant, you know, in terms of revenue. And when I talked about the inability to give revenue guidance, it wasn't, I wasn't implying that we didn't know how much it would be, but rather, you know, it's not something that I can give guidance on the timing of when it's going to be recognized.

Scott A. Bibaud: For all stages of licensing and this is consistent with that.

Scott A. Bibaud: So when you can.

Scott A. Bibaud: Do the math based on the revenue recognized.

Scott A. Bibaud: $550000.

Scott A. Bibaud: Last quarter.

Scott A. Bibaud: And 150000, we had recognized originally when we did the integration licenses from several years ago.

Scott A. Bibaud: So this is pretty significant.

Scott A. Bibaud: In terms of revenue.

Scott A. Bibaud: I talked about the inability to give revenue guidance it wasn't.

Scott A. Bibaud: I wasn't implying we didn't.

Scott A. Bibaud: How much it would be but rather.

Scott A. Bibaud:

Scott A. Bibaud: It's not something that I can give guidance on the timing of when it's going to be recognized.

Scott A. Bibaud: Because, you know, our policy has always been to give guidance only for the next quarter until we have solid visibility beyond that. And we don't have that kind of visibility yet. But when we get closer, we will, as long as it's consistent with our confidentiality with them, give guidance when we get closer. Okay, that's the next question about timing for ST. You answered that quite well.

Scott A. Bibaud: Yes.

Scott A. Bibaud: Policy has been to guide only for the next quarter.

Scott A. Bibaud: So we have solid visibility on that and we don't have that kind of visibility, but when we get closer we will.

Scott A. Bibaud: As long as it's consistent with our confidentiality with them.

Scott A. Bibaud: We'll give guidance when we get closer.

Scott A. Bibaud: So another question that came in asked: are the record number of commercial proposals for manufacturing and production licenses, or are they for manufacturing and production or just integration licenses? Yeah, I'll take that.

Scott A. Bibaud: Okay.

Speaker Change: The first question about timing for us to answer that quite well.

Scott A. Bibaud: So another question that came in or the record number of commercial proposals for manufacturing and production licenses.

Scott A. Bibaud: Or are they are they for manufacturing infection or just integration license.

Scott A. Bibaud: You know, for the most part, we're trying to push customers to install them. And there are, you know, most of our customers are used to working with the big tool manufacturers. And typically, if a tool manufacturer comes in and says, Hey, I've got a new tool that will solve some problems for you, the way that works is they usually ask the tool manufacturer to do a number of demos for them first.

Scott A. Bibaud: Okay.

Speaker Change: Yes, I'll take that.

Scott A. Bibaud: You know for the most part trying to push customers to install.

Scott A. Bibaud: And.

Scott A. Bibaud: There.

Scott A. Bibaud: But.

Scott A. Bibaud: Most of our customers are used to working with us.

Scott A. Bibaud: With the big tool manufacturers and typically have a tool manufacturer comes in and says Hey, I've got a new tool.

Scott A. Bibaud: Saw some problems for them.

Scott A. Bibaud: So they, The tool manufacturer, will do demos back at their fab and send them wafers. Some of them have that mindset with us, and for them, we would have to try to do an integration license before we get to manufacturing, but our goal is to try to get people to install and put it in their fab and start manufacturing those wafers as soon as possible. So I think all of our proposals that are outstanding right now are for manufacturing licenses, but I won't preclude the fact that we might have to do some demos before we get there. Have there been serious talks with wafer suppliers about a deal for blanket MST wafers on RFSOI? Yes, the answer is yes.

Scott A. Bibaud: Way that works is they usually ask the tool manufacturer to do a number of demos for them first so they.

Scott A. Bibaud: The told me factor will do demos back their fab incentives wafers some of them have that mindset with us and for them. We would have to do an integration license before we get to manufacturing, but our goal is try to get people to install Andrew.

Scott A. Bibaud: So manufacturing those wafers as soon as possible so.

Scott A. Bibaud: I think all of our proposals that are outstanding right. Now include for manufacturing licenses, but I won't preclude. The fact that we might have to do some demos before we get there.

Scott A. Bibaud: Okay.

Scott A. Bibaud: Have there been serious talks with first players about a deal for a blanket MST wafers on RF Soi.

Scott A. Bibaud: That's the thing that we've been talking about with various wafer suppliers for some time, and I think, yeah, we don't have anything to announce on that just yet. But, We do believe that when we're in a position where one of our RFSOI customers is ready to make a decision to go to production, which means it'll probably be another year or a year and a half at least before they go to production, we will be able to arrange for a wafer supplier to deliver MST RFSOI wafers to them if that's the path they want to go down.

Scott A. Bibaud: Yes, the answer is yes.

Scott A. Bibaud: Yes.

Scott A. Bibaud: <unk>.

Scott A. Bibaud: Talking about with.

Scott A. Bibaud: Murphy for suppliers for some time and I think.

Scott A. Bibaud: Yes, we don't have anything to announce on that just yet but.

Scott A. Bibaud: We do believe that when we're in a position where one of our RF soi customers.

Scott A. Bibaud: As regimen.

Scott A. Bibaud: Sure.

Scott A. Bibaud: Make a decision to go to production.

Scott A. Bibaud: It will probably be another year or year and a half at least before they go to production, we will be able to arrange for a wafer supplier to deliver MSC RF soi wafers for them yes.

Scott A. Bibaud: So that is definitely, we've done the pre-work for that, and I think we could put that together. But just to be clear, we also make it available to our RFSOI customers that they can buy RFSOI wafers and deposit MST on them themselves, and then they license that from us. So there are lots of ways in which it can work.

Scott A. Bibaud: Want to go down.

Scott A. Bibaud: So that is definitely.

Scott A. Bibaud: We've done the work for that and I think we could put that together.

Scott A. Bibaud: Just to be clear we also.

Scott A. Bibaud: Available to RF soi customers that they can buy RF soi wafers and deposit MST on them themselves and then they licensed from US So there's a lot of waste and waste.

Scott A. Bibaud: Okay, and a question, maybe you can comment on the replacement for TSI. I think just a little bit in the prepared comments, but has a replacement for TSI been found? Yeah, I would say we've spoken to almost a dozen companies, maybe less than that, but a lot of companies, and it seems very clear that we have a lot of good options. We have customers who, I mean, possible suppliers that have much better process technologies than they used to have at TSI, and we have ones with more specialty processes that we want.

Scott A. Bibaud: Okay.

Scott A. Bibaud: Okay.

Scott A. Bibaud: And.

Speaker Change: A question.

Scott A. Bibaud: Maybe you can comment on the replacement for gas side thinking just a little bit in the prepared comments, but has a replacement for Ts side and Bernstein.

Speaker Change: Yes, I would say we've spoken to.

Scott A. Bibaud: No.

Scott A. Bibaud: No.

Scott A. Bibaud: Almost a dozen companies maybe.

Speaker Change: Maybe less than that but.

Speaker Change: But a lot of companies.

Scott A. Bibaud: And it seems very clear that we have a lot of good options we have.

Scott A. Bibaud: Customers, who.

Scott A. Bibaud: I mean puzzle suppliers at a much better process technology that they used to have tsi.

Scott A. Bibaud: So it's, yeah, I think we're getting very close to starting working with one or more of them, and I don't have any doubt that we will end up working with multiple suppliers, not just one, but I think we'll get started with the first one very soon. So yeah, I think the replacement for TSI is well on its way. Okay, great. And then Richard Shannon had a follow-up question. Richard, if you would unmute and turn on your camera. Mike, I'm not letting me turn on my camera, but can you hear me?

Scott A. Bibaud: And we have once in more specialty processing plants.

Richard: Yes, I think we're getting very close to starting working with one or more of them and I don't have any doubt that we will end up working with multiple suppliers not just one but I think we'll get started with the first one very soon so I think the.

Richard: Replacement for TSS well on them.

Scott A. Bibaud: Okay, Great and then Richard Shannon.

Speaker Change: Hello question, Richard if you would.

Richard Cutts Shannon: Yeah, we can hear you. Go ahead. Okay, it's not allowing me to.

Speaker Change: Turning to Kevin.

Richard Cutts Shannon: Mike.

Richard Cutts Shannon: Oh, there we go. Now we can do this, maybe. Yeah, here we go. Scott, I wanted to follow up on one of your responses to my earlier questions here related to STMicro. You said you basically showed them all the data that they had requested back in 2020, but they didn't start using it until 2023 when they pulled it off the shelf. So, kind of applying this to your other sets of customer engagements, how many other customers have you essentially satisfied all of the data that they've asked for and are sitting around?

Richard: Let me turn my camera, but can you hear me, yes. We can hear you go ahead, okay, it's not allowing me to Oh, there we go.

Richard Cutts Shannon: Now we gave us Navy.

Richard Cutts Shannon: Okay.

Richard Cutts Shannon: Scott wanted to follow up on one of your responses to my earlier questions here related to S. T maker you said.

Richard Cutts Shannon: Are you basically show them all the data that they had requested back in 2020.

Richard Cutts Shannon: But it isn't until 2023, when they pulled it off the shelf. So I guess kind of applying this to your other set of customers engagements. How many customers have you simply satisfied all of the data that they've asked for and are sitting around and do you think it's reasonable to think about a delay between having the technology like satisfying.

Richard Cutts Shannon: And do you think it's reasonable to think about a delay between having the technology, like satisfying all the specifications, and then waiting X number of years, in STMicro's case, three years before you get to production? Is that something that you expect, or is that an externally long time?

Richard Cutts Shannon: The sex.

Richard Cutts Shannon: And then waiting X number of years and SD Micro case three years before you get to production is that some thing that you expect or is that not currently a long time.

Scott A. Bibaud: How would you relate this to your experiences with other customers? We haven't gotten to that point, but it seems like you've made some good progress. Yeah, it's a tricky one to answer Richard. To be honest, ST surprised me. I think it surprised all of us. We gave them results. They were very happy with them. They just never went off the dime.

Scott A. Bibaud: How would you relate this to your experiences with other customers, we haven't gotten to that point.

Scott A. Bibaud: But seem like you've made some good progress.

Scott A. Bibaud: Yes, it's a tricky one enhance our richard to be to be honest <unk> surprise me.

Scott A. Bibaud: We kept in conversation with them all the time, like every few months we would meet with them, and they'd say, yeah, keep waiting. I don't think that we should, we have a number of other customers that we've run wafers with, and they've seen good results, and they are not currently in the process of going to production. But I couldn't say exactly how many or whether I think it's going to be typical that they'll pull them off the shelf.

Scott A. Bibaud: I think surprised all of US we get we gave them results. They were very happy with them and then just.

Scott A. Bibaud: We just they just never went off the dime, we kept in conversation with them all the time like every two months with them and they'd say, yes.

Scott A. Bibaud: Keep waiting.

Scott A. Bibaud: I don't think we so we.

Scott A. Bibaud: Have a number of other customers that we've run wafers with and they have seen good results and they are not currently in.

Scott A. Bibaud: I can say there are a lot of customers who we've shown good results to and we keep talking to them, and they keep kind of pushing it off a little, but we do think that we'll engage with them sometime soon. And JDA-1 is a good example, but we have other examples like that. Actually, we have a lot of examples like that.

Scott A. Bibaud: The process of going to production, but I Couldnt say exactly how many are weather I think that's going to be typical that they pull it off the shelf.

Scott A. Bibaud: I can say there are a lot of customers, who we yes that we've shown the good.

Scott A. Bibaud: Results too.

Scott A. Bibaud: Okay.

Scott A. Bibaud: And we keep talking to them and they keep kind of pushing.

Scott A. Bibaud: So, the frightening thing is that if they could just see the results and pull the trigger, That would be great, and that's what, you know, normally in a business like ours, a customer puts out an RFQ, they need a certain type of product, and you go and pitch your product, and when they decide yours is the best, you win it. That's what my experience in semiconductors has been my whole career. But this business we have is a little bit different.

Scott A. Bibaud: Pushing it off a little but we do think that will engage with them sometime soon and maybe a one is a good example, but we have other examples like that actually we have a lot of examples like that so.

Scott A. Bibaud: Yeah, So frightening thing is.

Scott A. Bibaud: If if they could just see the results and pulled the trigger that.

Scott A. Bibaud: That would be great.

Scott A. Bibaud: And that's what.

Scott A. Bibaud: That's.

Scott A. Bibaud: Normally in a business like ours.

Scott A. Bibaud: A customer puts out an RF Q they need a certain type of product and you go and pitch your product and when they decide yours is the best you win it that's what my experience in semiconductors has been my whole career.

Scott A. Bibaud: We're going out and proactively telling them, hey, if you used our technology, we could make your product a little bit better. And for the most part, you know, we're kind of putting that into their minds. So even after you've convinced them, that's the key. We sometimes have to wait until the planned change of that process or node is happening for them to implement it.

Scott A. Bibaud: But this business we have is a little bit different we're going out and proactively telling them Hey, if you used our technology, we can make your product a little bit better and for the most part.

Scott A. Bibaud: <unk>.

Scott A. Bibaud: We're kind of putting that into their minds. So.

Scott A. Bibaud: Convinced that's the case.

Scott A. Bibaud: And but I can't say whether that's, you know, would take a long time or a short time. We haven't had enough experience with it. It seems like in all the conversations we've had on these conference calls and offline as well, it just smells like RFS-OI, you know, kind of mirrors STMicro in a way where it seems like you've suggested or outright told us that you satisfy the requirements. I think once or more than once you've talked about some requirements changing at some point, but it seems like RFS-OI mirrors a lot of what Is that a fair comparison?

Scott A. Bibaud: We sometimes have to wait until the planned change of that process are node is happening for them to implement it.

Scott A. Bibaud: And.

Scott A. Bibaud: But I cant say whether thats.

Scott A. Bibaud: We would take a long time or short time, we havent experienced that.

Scott A. Bibaud: It seems like in all the conversations we've had on these conference calls and offline as well it just smells like RF Soi kind of mirror ASC micron away, where it seems like you've suggested or outright outright told us that you satisfy the requirements.

Scott A. Bibaud: Once once or more than once you've been talked about some requirements changing.

Scott A. Bibaud: Yeah. Yeah. So let's say we have a customer, and we don't engage with them, and we engage with them as soon as we can. Right. As soon as we can get them interested enough to start testing out our technology. And that customer had a plan for some process to bring out a new version of it in two years.

Scott A. Bibaud: At some point, but it seems like RF Soi mirrors, a lot of what you're what you described with SD micro is that fair comparison, yeah, Yes, and let me just so let's say, we have a customer and we don't engage with them.

Scott A. Bibaud: We engage with them as we can alright as soon as we can get them interested enough to start testing out our technology.

Scott A. Bibaud: And that customer had a planned and.

Scott A. Bibaud: And so they're working on that new process, and simultaneously, we're trying to show them that our technology is good. And maybe even with only one year left, they will say, wow, your technology is really good, but it's too late to implement it into our other process. We've already been working for it for more than two years, and so you kind of missed the bus on that one. Now we have to wait for that one to go into production, and then it will be in production for a few years before they make a new version, and so sometimes that's just what we face. But like I say, if we have enough shots on net, we're going to hit the right timing with some of them, and the other ones will come back around.

Scott A. Bibaud: For some process to bring out a new version of it in two years and so they are working on that new process and simultaneously, we're trying to show to them that our technology is good and maybe even with only one year left they say Wow. Your technology is really good but it's too late to implement <unk>.

Scott A. Bibaud: Our other process, so <unk> already been working for more than two years and so you've kind of missed the bus on that one now we have to wait for that one day production and be in production for a few years before they make a new version of it.

Scott A. Bibaud: And so.

Scott A. Bibaud: So sometimes that's just what we face.

Scott A. Bibaud: But.

Richard Cutts Shannon: Fair enough perspective. One last question from me, Scott. Just touching on the topic of leading edge, and I think I've even asked this in past calls here, but sounds like you've got some long, long periods of engagement with multiple players at Leading Edge. I guess my essential question here is, do you think that work is mature enough here that you have the possibility of intersecting with the first generation of new technology coming out?

Scott A. Bibaud: Like I say, if we have enough shots on net we're going to hit the right timing with some of them in the other ones will come back around.

Richard Cutts Shannon: Okay.

Speaker Change: <unk> one last question for me Scott.

Richard Cutts Shannon: Just touching on the topic of leading edge and I think I've asked this in.

Richard Cutts Shannon: Past calls here, but it sounds like you're you've got some long.

Richard Cutts Shannon: Long period engagement with multiple.

Richard Cutts Shannon: Splitters at leading edge.

Speaker Change: I guess Mike.

Richard Cutts Shannon: The Central question here is do you think that work is is mature enough here that you have the possibility to vendors.

Richard Cutts Shannon: You're talking about nanosheeter data all around here, which I think is being implemented first on the two nanometer node with one or more guys out there. Do you think you're going to be early enough to do that, or does that seem like it might be more of a follow-on derivative process later in the time frame? It's hard to say.

Richard Cutts Shannon: With the first generation of a new technology coming out you're talking about NAND Sheeder gate, all around here, which I think is being.

Richard Cutts Shannon: Being implemented first on the two nanometer node with one or more guys out there do you think youre going to be early enough to do that.

Richard Cutts Shannon: Or does that seem like it might be more of a follow on.

Scott A. Bibaud: I can say that the leading edge guys know about our technology, and they know how it could help them. And so it's kind of, obviously, if one of them had decided they were definitely going to do that. They certainly would have had to do a license with us. You know, one of the things about Gate All Around and the new nodes is that they're so hard to make. They are so complicated that they can't just do it. What we call a demo in the industry is when they run some wafers and they send them to us, and then we put our technology on them, and then we send them back.

Scott A. Bibaud: Derivative process later in the later in the timeframe.

Scott A. Bibaud: Hard to say I can say that the leading edge guys know about our technology and the.

Scott A. Bibaud: They know how it could help them.

Scott A. Bibaud: And so it's kind of.

Scott A. Bibaud: Obviously, if one of them had decided they were definitely going to do that.

Scott A. Bibaud: They certainly would have had to do a license with us.

Scott A. Bibaud: One of the things about gate all around.

Scott A. Bibaud: And the new nodes, there so hard to make.

Scott A. Bibaud: They are so complicated that they can't just.

Scott A. Bibaud: But for Gate All Around, it's so complicated to make these things that we can't do that. We really have to install them at the customer site. And so when we do that, they have to sign a license. When they get the license, we definitely will announce it. And obviously, you haven't announced it yet, but those I think we're well positioned to get into one of those. I also think, you know, the Gate All Around and even the most advanced FinFET nodes still are running at relatively low yields compared to like, you know, more mature nodes, and there's room for us to be even incorporated to improve yield in those designs.

Scott A. Bibaud: What we call a demo in industry is when they do run some wafers and they send them to US and then we put our technology on and then we send it back.

Scott A. Bibaud: But for gate all around it's so complicated to make these things that we can't do that we really have to install at the customer site.

Scott A. Bibaud: And so when.

Scott A. Bibaud: We do that exercise license when they do we'll definitely we'll announce it.

Scott A. Bibaud: And obviously you have announced it yet, but those I think we're well positioned to get into one of those I also think.

Scott A. Bibaud: You know the gate all around and even the most advanced finfet nodes still are running at relatively low yield.

Scott A. Bibaud: Fingers crossed that we'll get that done. Fair enough. That's all my questions again, Scott. Thank you. Okay, and just one last question here from the Q&A line, and that is, could you describe how the business model for entering the GAN market would be different from your approach to license, your approach to date to licensing of MST? Yeah, yeah.

Scott A. Bibaud: Compared to like.

Scott A. Bibaud: More mature nodes and there's room for us to be even incorporated to improve yields and those designs. So.

Speaker Change: Fingers crossed it will we'll get that.

Speaker Change: Okay Fair enough that's all my questions against thank you.

Scott: Sure. Thanks Richard.

Speaker Change: Okay, and just one last question here.

Scott A. Bibaud: G&A lines.

Speaker Change: So could you describe how business model for entering the gaming market would be different from your approach to licensing.

Scott A. Bibaud: So the GAN market is very interesting. Actually, this whole compound semiconductor is an area that we've been doing research on for a few years. So although this is our first announcement, it isn't something we just started thinking about. There are multiple ways that our business model can be used for GAN. We can just license our MST technology, just like we do today with regular semiconductor makers to adopt MST on wafers and then build GAN wafers on top of that. That's one way that we could do it.

Scott A. Bibaud: Approach date.

Scott A. Bibaud: The licensing of MST.

Scott A. Bibaud: Okay.

Scott A. Bibaud: Yeah, Yeah. So again market is very interesting actually.

Scott A. Bibaud: Compound.

Scott A. Bibaud: Conductor is an area that we've been doing research on.

Scott A. Bibaud: For a few years. So although this is our first announcement it isn't something we just start thinking about.

Scott A. Bibaud:

Scott A. Bibaud: So there's multiple ways that our business model can be used for Gan. We can just license our MST technology, just like we do today with regular semiconductor makers to adopt MST on wafer and then built Gan wafers on top of that.

Scott A. Bibaud: We will probably license our GaN technology separately from the rest of our licensed technology because it may have very high value. The second thing we could do is, maybe we could become a manufacturer of GaN wafers, at least in modest volumes, and that would allow us to generate revenue. And if it was a very high-value technology, maybe we could make, you know, a very nice looking gross margin there and help to subsidize the rest of our business.

Scott A. Bibaud: That's one way that we could do it.

Scott A. Bibaud: Yes.

Scott A. Bibaud: We will probably will.

Scott A. Bibaud: Our Gan technology separately from the rest of our license this technology because it it may have very high value.

Scott A. Bibaud: The second thing we could do is maybe we could become a manufacturer of Gan wafers at least in modest volumes.

Scott A. Bibaud: And that would allow us to generate revenue and if it was very high value.

Scott A. Bibaud: We don't have a decision to do that yet. I mean, we have a very strong philosophy about making a business model that gives us a lot of leverage on the bottom line, and so if we were to become a manufacturer, obviously, we'd have to have a lot more capex, which might not work well with that. But we could do something on the smaller volume manufacturing side. And I don't know.

Scott A. Bibaud: <unk> makes it.

Scott A. Bibaud: Very nice looking at gross margin, there and help to subsidize the rest of our business we.

Scott A. Bibaud: We don't have a decision to do that yet.

Scott A. Bibaud: We have a very strong philosophy about making a business model that.

Scott A. Bibaud: And a lot of leverage to the bottom line and so.

Scott A. Bibaud: We would be on manufacturer obviously go down.

Scott A. Bibaud: Have a lot more capex.

Scott A. Bibaud: Which might not.

Scott A. Bibaud: Worked well with that but we could do something on the.

Scott A. Bibaud: I think for our customers who would go into high volume manufacturing, it's most likely that we'd license directly to them. So, we've been looking at the GAN market for a while. We've had a lot of marketing studies going on about how to approach it, but we haven't got a final determination about what we would do. But I can tell you that I think it would be a much faster time to market.

Scott A. Bibaud: On the smaller volume manufacturing side.

Scott A. Bibaud: And.

Scott A. Bibaud: But.

Scott A. Bibaud: I think for our customers, who would go into high volume manufacturing, it's most likely that we'd like to directly to them.

Scott A. Bibaud: No.

Scott A. Bibaud: We've been looking at the Gan market for a while we've had a lot of marketing studies going on about how to approach it but we haven't got a final determination about.

Scott A. Bibaud: And I'm pretty excited about the prospects of MST there and the prospects in a few other areas of compound semiconductors. Great. Okay, Scott, that concludes the Q&A session. If you could proceed with any closing comments, please do.

Scott: What we would do I can tell you I think it's a it.

Speaker Change: It would be a much faster time to market.

Scott A. Bibaud: And.

Scott A. Bibaud: I'm pretty excited about the prospects of empty, there and the prospects and a few other areas in the compound semiconductor market.

Scott A. Bibaud: Okay, sure. Well, I hope today we've given you a good picture of the compelling prospects which Atomera is pursuing. We will be at the Oppenheimer 9th Annual Emerging Growth One-on-One Conference on May 9. If you're planning to attend, I would welcome the opportunity to meet you.

Speaker Change: Great Okay Scott.

Scott: That concludes the Q&A session, if you could see with any closing comments.

Scott: Okay sure.

Scott: Well I hope today, we've given you a good picture of the compelling prospects, which Adam Arris pursuing we will yet the Oppenheimer 19th annual emerging growth one on one conference on May nine.

Operator: Please continue to look for our news articles and blog posts, which are available along with investor alerts on our website, atomera.com. Should you have additional questions, please contact Mike Bishop. We'll be happy to follow up. Thank you again for your support, and we look forward to our next update call.

Mike Bishop: If you are planning to attend I would welcome the opportunity.

Operator: Please continue to look for our news articles and blog posts, which are available along with investor alerts on our website at <unk> Dot com. So you have additional questions. Please contact Mike Bishop who will be happy to follow up. Thank you again for your support and we look forward to our next update call.

Operator: Great. Thanks, Scott This concludes the at America.