Q1 2025 Atomera Inc Earnings Call
Operator: with the company's investor relations. As in prior quarters, we're using zoom and we will follow a similar presentation format with participants in a listen only mode.
As in prior quarters, we're using deal and we will follow a similar presentation format with participants in a listen only mode. We will open with prepared remarks from Scott vivo, Adam as President and CEO and Frank Lorenzo Adam Our CFO, then we will open the call to questions.
Operator: We will open with prepared remarks from Scott Bibaud, Atomera's President and CEO, and Frank Laurencio, Atomera's CFO. Then we will open the call to questions.
Operator: If you are joining by telephone, you may follow a slide presentation to accompany our remarks on the events and presentation sections of our investor relations page on our website.
If you are joining by telephone you may follow a slide presentation to accompany our remarks on the events and presentations section of our Investor Relations page on our website.
Operator: Before we begin, I would like to remind everyone that during today's call, we will make forward-looking statements. These forward statements, whether in prepared remarks or during the Q&A session, are subject to inherent risks and uncertainties.
Before we begin I would like to remind everyone that during today's call. We will make forward looking statements. These forward statements whether in prepared remarks or during the Q&A session are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the risk factors section of our filings with the Securities and Exchange Commission specifically.
Operator: These risks and uncertainties are detailed in the risk factors section of our filings with the Securities and Exchange Commission, specifically in the company's end report on Form 10-K filed with the SEC on March 4, 2025. except as otherwise required by federal securities laws, Atomera disclaims any obligation to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions, and circumstances.
The company's annual report on Form 10-K filed with the SEC on March four 2025.
Except as otherwise required by federal Securities laws, <unk> disclaims any obligation to update or make revisions to such forward looking statements contained herein or elsewhere to reflect changes and expectations with regards to those events conditions and circumstances.
Operator: Also, please note that during this call, we will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is also posted on our website.
Also please note that during this call we will be discussing non-GAAP financial measures as defined by SEC regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is also posted on our website.
Scott Bibaud: Now, I would like to turn the call over to our president and CEO, Scott Bibaud. Go ahead, Scott.
Speaker Change: Now I would like to turn the call over to our President and CEO Scott Vivo go ahead Scott.
Scott Vivo: Thanks, Mike.
Scott Bibaud: I'd like to start out today by giving a few more details on our recent partnership announcement with a major capital equipment provider, who unfortunately has a policy against allowing their name to be used in partners press releases. First, let me say that we've had a long relationship with this equipment maker, and this agreement is something both companies have been working towards for a long time. They want to bring advanced material solutions to their customers to solve problems in the gate-all-around space, and we can help them do that. Atomera benefits by leveraging our partners' detailed knowledge of these large customers' applications, design goals, organizations, and decision-making.
Scott Vivo: I'd like to start out today by giving a few more details on our recent partnership announcement with a major capital equipment provider, who unfortunately has a policy against allowing their name to be used in partners' press releases.
Scott Vivo: First let me say that we've had a long relationship with this equipment maker and disagreement is something both companies have been working towards for a long time.
Scott Vivo: They want to bring advanced material solutions to their customers to solve problems and the gate all around space and we can help them do that.
Scott Vivo: Adam era benefits by leveraging our partners detailed knowledge of these large customers applications design goals organizations and decision makers Ulta.
Scott Bibaud: Ultimately, if we are both successful, Atomera will get more licensees into production faster and our partner will sell more equipment and services to our mutual customers.
Ultimately if we are both successful Adam era, we will get more licensees into production faster and a partner, we'll sell more equipment and services to our mutual customers.
Scott Bibaud: Let me tell you why I'm excited about this agreement. Advanced Node customers have huge teams working on multiple different aspects of each new technology node. some working one or even two nodes ahead, and some working on the node currently in production. Our partner has detailed insight into each of these efforts working collaboratively with their customers to find solutions in many different areas. Inevitably, the customer wants to see actual silicon results to prove that the solution works. And when they get them, they ask for even more results. Each request is more detailed and specified. Although Atomera has a very sophisticated development environment, it pales in comparison to what our partner OEMs can bring to bear.
Scott Vivo: Let me tell you why I'm excited about this agreement.
Scott Vivo: Vance node customers have huge teams working on multiple different aspects of each new technology node.
Scott Vivo: Some working one or two or even two nodes ahead and some working on the note currently in production.
Scott Vivo: Our partner has detailed insight into each of these efforts working collaboratively leave with their customers to find solutions in many different areas.
Scott Vivo: Inevitably customer wants to see actual silicon results to prove that the solution works.
Scott Vivo: And when they get them they ask for even more results.
Scott Vivo: Each requested more detailed and specific.
Speaker Change: Although Adam area has a very sophisticated development environment. It pales in comparison to what our partner Oems can bring to bear.
Scott Bibaud: and which we will be able to use to provide these more detailed tests. By doing so, we can deliver solutions to the customer that are more optimized and validated and therefore may go into production more quickly.
Scott Vivo: And which we will be able to use to provide these more detailed tests.
Scott Vivo: By doing so we can deliver solutions to the customer that are more optimized and validated and therefore may go into production more quickly.
Scott Bibaud: probably even more important. We will be rowing downstream with our partner on the sales and marketing side of the equation. As a small company, we do not have a large and sophisticated sales organization that can be so helpful to close designs within the complex decision making structure of these large customers. Since both of us will be driving these designs towards production, our partner company's direct sales force will be assisting us along the way, which will be an invaluable resource to us.
Scott Vivo: Probably even more importantly, we will be rolling downstream with our partner on the sales and marketing side of the equation.
Scott Vivo: As a small company, we do not have a large and sophisticated sales organization that can be so helpful to close designs within the complex decision, making structure of these large customers.
Scott Vivo: Since both of US will be driving these designs towards production our partner companies direct sales force will be assisting us along the way, which will be an invaluable resource to us.
Scott Bibaud: Just last quarter, I talked about how Atomera's MST technology can solve many of the problems in gate all-around transistors. This partnership will help us to promote and ultimately close sales in that area. While the collaboration agreement details are confidential, I can assure you that the terms do not have a significant impact on our long-standing business model of license fees and royalties. The primary benefit for both our companies in this deal is to grow the pie larger, not to take pieces of each other's business. Although the stated aim of the agreement is on gate all-around architectures, there is little doubt the partnership will extend into advanced memories and other areas as well.
Scott Vivo: Last quarter I talked about how Adam Erez MST technology can solve many of the problems and gate all around transistors. This partnership will help us to promote and ultimately closed sales in that area.
Scott Vivo: While the collaboration agreement details are confidential I can assure you that the terms do not have a significant impact on our long standing business model of license fees and royalties.
Scott Vivo: The primary benefit for both our companies and this deal is to grow the pie larger not to take pieces of each other's businesses.
Scott Vivo: Although the stated aim of the agreement is on gate all around architectures, there's little doubt the partnership will extend into advanced memories and other areas as well.
Scott Bibaud: Timing of this announcement coincides with the rising use of EPI in Advanced Logic as well as in High Performance DRAM, where High-K has been adopted. As EPI applications are more widely embraced, the barriers to implement MST go down. size and the growth of the epi market is therefore an indicator of the potential for MSD sales and in 2027 the epi equipment market is expected to be approximately 2.6 billion dollars with a CAGR in the leading edge nodes of 10 to 15 percent.
Scott Vivo: Timing of this announcement coincides with the rising use of Abbvie and advanced logic as well as in high performance DRAM, where high K has been adopted.
Scott Vivo: <unk> <unk> applications are more widely embraced the barriers to implement MST go down the size on the growth of the Etsy market is therefore, an indicator of the potential for MST sales and in 2027, the MP equipment market is expected to be approximately $2 $6 billion with a <unk>.
Scott Vivo: AGR in the leading edge nodes of 10% to 15%.
Scott Bibaud: Even before finalizing this agreement, we've been making significant progress in Gate All-Around applications, generating much more detailed silicon-validated performance enhancement data for customers, as well as depositing MST films on customer wafers for evaluation. We've established footholds in each of the Gate All Around customers that we are confident will expand over the rest of this year, assisted by our new partnership.
Scott Vivo: Even before finalizing this agreement we've been making significant progress in gate all around applications generating much more detailed silicon validated performance enhancement data for customers as well as depositing MST films on customer wafers for evaluation.
Scott Vivo: We've established footholds in each of the gate all around customers. They vary we are confident will expand over the rest of this year assisted by our new partnership.
Scott Bibaud: On the memory side, we've been granted new patents focused on DRAM sense amplifiers, which are relevant for both high bandwidth as well as standard DDR memory. We are actively leveraging this IP into our current discussions with a large memory provider. Late in 2024, many of our RFSOI customers expressed the need to improve low noise amplifiers, or LNAs, in addition to our prior efforts on RF power. using TCAD and silicon test result data. We determined that MST can significantly improve the performance of LNAs in RFSOI devices. Just recently, mobile phone manufacturers have started putting new emphasis on LNA improvements to meet the increasing demands of newer 5G technology.
Scott Vivo: On the memory side, we've been granted new patents focused on DRAM sense amplifiers, which are relevant for both high bandwidth as well as standard DDR memories.
Scott Vivo: We are actively leveraging this IP into our current discussions with a large memory providers.
Scott Vivo: Late in 2020 for many of our RF Soi customers expressed the need to improve low noise amplifiers or <unk>. In addition to our prior efforts on RF power switches.
Scott Vivo: Using tea CAD and Silicon test result data.
Scott Vivo: We determined that MST can significantly improve the performance of <unk> and RF Soi devices.
Scott Vivo: Just recently mobile phone manufacturers have started putting new emphasis on M&A improvements to meet the increasing demands of newer five G technologies.
Scott Bibaud: So we are seeing widespread interest from customers.
Scott Vivo: So we are seeing widespread interest from customers.
Scott Bibaud: Our presentation at RF Insights highlighted the new application and has generated lots of inbound interest. Indeed, during the last few months, we've worked with several different RFSOI manufacturers to start new wafer runs using our partner Soitech's ultra-thin RFSOI wafers to prove out these LNA benefits. With good results, we believe our customers will want to take this into production relatively quickly. Work with power customers also continues to grow with interest in new applications and voltage levels, many of which are driven by demand for AI servers.
Scott Vivo: Our presentation at RF Incise highlighted the new application and has generated lots of inbound interest. Indeed during the last few months, we've worked with several different RF soi manufacturers to start new wafer runs using our partner soy techs ultra thin RF soi wafers to prove out these LNG.
Scott Vivo: Benefits.
Scott Vivo: With good results, we believe our customers will want to take this into production relatively quickly.
Scott Vivo: Worked with power customers also continues to grow with interest in new applications and voltage levels, many of which are driven by demand for AI servers.
Scott Bibaud: But let me share what I can on progress with our most important power customer, STMicro. During the last six months, our biggest focus with SD Micro has been on optimizing manufacturability, yield, and throughput in preparation for high-volume manufacturing. And we've made great progress here. Our two teams are meeting together on a weekly basis as we push to get the best performance out of our efforts. Many different lots are in the FAB, with frequent test results indicating a clear path towards qualification.
Scott Vivo: But let me share what I can on progress with our most important power customer SD micro.
Scott Vivo: During the last six months, our biggest focus with SD micro has been on optimizing manufacture ability yield and throughput in preparation for high volume manufacturing and we've made great progress here. Our two teams are meeting together on a weekly basis as we push to get the best performance out of.
Scott Vivo: Our efforts.
Scott Vivo: Many different lots are in the fab with frequent test results, indicating a clear path towards qualification.
Scott Bibaud: ST has not authorized me to provide additional insight into their schedule though. One measure of ST's regard for our technology is the interest we've seen from other groups within ST. Today, we are in active discussions with three other product areas in ST beyond smart power devices. Each of these has the potential to lead to new licenses and future royalty streams. It's clear that Atomera's technology focus areas have excellent overlap with ST's overall technology, strategy, and direction. We believe this is a very important validation of our technology's effectiveness, coming as it does from a customer who has a deep understanding of its potential from their hands-on experience.
Scott Vivo: S. T has not authorized me to provide additional insight into their schedule, though.
One measure of St's regard for our technology is the interest we've seen from other groups within SP. Today, we are in active discussions with three other product areas and S. T beyond smart power devices. Each of these has the potential to lead to new licenses and future royalty streams.
Scott Vivo: It's clear that <unk> technology focus areas have excellent overlap with St's overall technology strategy and direction.
Scott Vivo: We believe this is a very important validation of our technologies effectiveness coming as it does from a customer who has a deep understanding of its potential from their hands on experience.
Scott Bibaud: Now, a brief update on each of our licensees. We continue discussions with our JDA-1 customer about meeting new requirements they've raised. Of course, we recognize this effort needs to move faster, and we believe that working with our new equipment provider will help make that happen. For both our JDA-2 and Fabless licensees, we are in the process of running wafers, and we expect to see results of those later this year. Each of these companies has expressed interest in also working with us in new technology areas. Likewise, we are in discussion with our foundry licensee and we hope to start new lots with them soon.
Scott Vivo: Now a brief update on each of our licensees.
Scott Vivo: We continue discussions with R. J D. J D. A one customer about meeting new requirements. They've raised of course, we recognize this effort needs to move faster and we believe that working with our new equipment provider will help make that happen.
Scott Vivo: For both our J D E two and Fabulous licensees, we are in the process of running wafers and we expect to see results of those later this year. Each of these companies has expressed interest in also working with us in new technology areas.
Scott Vivo: Likewise, we are in discussion with our foundry licensee and we hope to start new lots with them soon.
Scott Bibaud: Our progress with new customers this quarter has been excellent, and we continue to move forward with the two very high potential transformative customers discussed in our last call. we are encouraged by the amount of work they want to do and the speed at which they are moving.
Scott Vivo: Our progress with new customers. This quarter has been excellent and we continue to move forward with the two very high potential transformative customers discussed in our last call.
Scott Vivo: We are encouraged by the amount of work they want to do and the speed at which they are moving well.
Scott Bibaud: We also started discussions with new customers in entirely new areas for us. We're working today to engage with them in first discussions and hopefully that will lead to licensing and our revenue opportunities with them later this year.
Scott Vivo: We also started discussions with new customers in entirely new areas for us.
Scott Vivo: We're working to today to engage with them and first discussions and hopefully that will lead to licensing and our revenue opportunities with them later this year.
Scott Bibaud: Previously, we've described our work to expand into a new product category, compound semiconductors, and more specifically, gallium nitride. As a brief refresher, gallium nitride is a wide bandgap semiconductor material that supports a broad range of applications, including consumer power supplies, automotive electrification, and power electronics for AI data sets. The market for GAN in these applications is growing quickly and is forecast to exceed $2 billion at the device level by the end of the decade, growing at about a 40% CAGR. Last year, we described exciting results from initial studies of MST improving GAN growth on silicon substrate.
Scott Vivo: Previously we've described our work to expand into a new product category compound semiconductors, and more specifically gallium nitride as.
Scott Vivo: As a brief refresher gallium nitride is a wide band gap semiconductor material that supports a broad range of applications, including consumer power supplies automotive electrification and power electronics for AI data centers.
Scott Vivo: The market for Gan in these applications is growing quickly and is forecast to exceed $2 billion at the device level by the end of the decade growing at about a 40% CAGR.
Scott Vivo: Last year, we described exciting exciting results from initial studies of MST, improving Gan growth on silicon substrates.
Scott Bibaud: Customers found them interesting but asked for electrical data to demonstrate the impact at the device level. We have been working to fabricate devices, and this quarter, as part of the previous announced partnership with Sandia National Labs. We completed the world's first GAN devices produced using MST technology. This is an exciting accomplishment. Data collection from these first-of-kind devices is still in progress, but we are now seeing indications of improved electrical performance consistent with our previous observation of improved material quality. As would be expected from first-of-kind tests, there are some elements of these devices that aren't optimized, and we're already working on the next round with a target of a complete customer-shareable data set illustrating the benefits of MST for GAN applications.
Scott Vivo: Customers find them interesting, but app for electrical data to demonstrate the impact at the device level we.
Scott Vivo: We have been working to fabricate devices.
Scott Vivo: And this quarter as part of the previous announced partnership with Sandia National Labs, We completed the world's first Gan devices produced using MST technology.
Scott Vivo: This is an exciting accomplishment data collection from these first of kind devices is still in progress, but we are now seeing indications of improved electrical performance consistent with our previous observation of improved material quality.
Scott Vivo: As would be expected from first of kind tests. There are some elements of these devices that aren't optimized and we've already and we're already working on the next round with a target of a complete customer share will dataset illustrating the benefits of MST for Gan applications.
Scott Bibaud: Several of our existing customers are active in GAN production, so once we have this data, we should have a ready audience. And there are other GAN foundries and IDMs that would help us expand beyond the current customer base as well. We are very excited about MSD for GAN, and so are our partners. Just recently, Sandia National Labs renewed our access program so that we can do more work together.
Scott Vivo: Several of our existing customers are active in Gan production. So once we have this data we should have a ready audience.
Scott Vivo: And there are other Gan foundries and idms that would help us expand beyond the current customer base as well.
Scott Vivo: We are very excited about MSP for Gan and so are our partners just recently Sandia National Labs renewed our access program. So that we can do more work together.
Scott Bibaud: Robert Mears wrote a great article on this topic, recently published in Compound Semiconductor Magazine, which you can find on our website. The beginning of this year has been a very busy time for us across all our markets and product areas. Work on STMicro is moving towards completion. We are seeing customer expansion in Power, RF, and in other application areas, which we hope to talk about in future calls. The work we are doing on Gate All Around and memory is tied directly to the biggest driver of the semiconductor industry today, the rollout of AI infrastructure, and our newly announced partnership with a major semiconductor equipment provider will help us accelerate and close license deals to take advantage of it.
Scott Vivo: Bert mirrors wrote a great article on this topic recently published and compound semiconductor magazine, which you can find on our website.
Scott Vivo: The beginning of this year has been a very busy time for us across all our markets and product areas work on SD micro is moving towards completion, we are seeing customer expansion and power RF and in other application areas, which we hope to talk about in future calls.
Scott Vivo: The work, we're doing on gate, all around and memory is tied directly to the biggest driver of the semiconductor industry today, the rollout of AI infrastructure and our newly announced partnership with a major semiconductor equipment provider will help us accelerate and close license deals to take advantage.
Scott Bibaud: Finally, our GAN work is not only aligned with a major industry push, but we also believe it can be executed with faster time to revenue than our other segments.
Scott Vivo: Finally, our Gan work is not only aligned with a major industry push but we also believe it can be executed with faster time to revenue than our other segments.
Scott Bibaud: The workload at Atomera has gotten to the point where we are actively recruiting for staff in our engineering team focused on transition to high-volume production. and in our sales and marketing team focused on closing deals. With applications developing momentum in so many areas, we believe it's only a matter of time before Atomera becomes a technology licensing powerhouse within the semiconductor industry.
Scott Vivo: The workload at Emera has gotten to the point, where we are actively recruiting for staff in our engineering team focused on transition to high volume production.
Scott Vivo: And in our sales and marketing team focused on closing deals with.
Scott Vivo: With applications developing momentum in so many areas. We believe it's only a matter of time before Adam era becomes a technology licensing powerhouse within the semiconductor industry.
Frank Laurencio: Now Frank will review our financial...
Speaker Change: Now Frank will review our financials.
Frank Laurencio: Thank you, Scott. At the close of the market today, we issued a press release announcing our results for the first quarter of 2025. This slide shows our summary financial. Our gap net loss for the first quarter of 2025 was $5.2 million, or $0.17 per share, compared to a net loss of $4.8 million, or $0.19 per share, in Q1 2025. Gap operating expenses in the first quarter of this year were $5.5 million, which was an increase of $448,000 from $5 million in Q1 2024. The increase in OPEX was due to a $397,000 increase in R&D expenses, reflecting higher outsourced device fabrication services.
Frank Lorenzo: Thank you Scott.
Frank Lorenzo: At the close of the market today, we issued a press release announcing our results for the first quarter of 2025. This slide shows our summary financials.
Frank Lorenzo: Our GAAP net loss for the first quarter of 2025 was $5 $2 million or <unk> 17 per share compared to a net loss of $4 $8 million or <unk> 19 per share in Q1 2024.
Frank Lorenzo: GAAP operating expenses in the first quarter. This year were $5 $5 million, which was an increase of $448000 from 5 million in Q1 2024.
Frank Lorenzo: The increase in Opex was due to a $397000 increase in R&D expenses, reflecting higher outsourced device fabrication services to support increased customer activity.
Frank Laurencio: to support increased customer activity, and a $277,000 increase in G&A expense, primarily due to higher legal expenses. These increases were partly offset by a $226,000 decline in sales and marketing expenses.
Frank Lorenzo: And the $277000 increase in G&A expense, primarily due to higher legal expenses.
Frank Lorenzo: These increases were partly offset by a $226000 decline in sales and marketing expenses, mostly due to larger to lower head count.
Frank Laurencio: mostly due to larger to lower head. Non-GAAP net loss in Q1 2025 was $4.4 million, compared to a loss of $4 million in Q1 of last year, due to a $468,000 increase in non-GAAP operating expense, reflecting the same factors I just discussed. Stock compensation expense, which is the main difference between GAAP and non-GAAP operating expenses, were $1 million in both periods. Sequentially, Q1 non-GAAP net loss of $4.4 million compares to a $3.9 million loss in Q4 of 2024, primarily due to the same higher R&D and legal expenses I spoke about earlier, offset by lower sales and marketing due to headcount.
Frank Lorenzo: non-GAAP net loss in Q1, 2025 was $4 $4 million compared to a loss of $4 million in Q1 of last year due to a $468000 increase in non-GAAP operating expense, reflecting the same factors I just discussed.
Frank Lorenzo: Stock compensation expense, which was the main difference between GAAP and non-GAAP operating expenses were $1 million in both periods.
Frank Lorenzo: Sequentially Q1, non-GAAP net loss of $4 $4 million compares to a $3 $9 million loss in Q4 of 2024, primarily due to the same higher R&D and legal expenses I spoke about earlier offset by lower sales and marketing due to head count.
Frank Laurencio: Our balance of cash, cash equivalents, and short-term investments on March 31st, 2025 was $24.1 million, compared to $26.8 million on December 31st, 2024. We use $4.8 million of cash in operating activities in Q1 compared to $4.1 million in Q1 2024 and $3 million in Q4 of last year. As has been the case in prior years, cash outlays in the first quarter will be higher this year than in other quarters, reflecting payments for items that hit our P&L throughout the year. Early in Q1, we raised $2.4 million under our ATM facility by selling approximately 163,000 shares at an average price of $15.19, putting us in a comfortable cash position such that we have not needed to access the capital market during the recent volatile month.
Frank Lorenzo: Our balance of cash cash equivalents and short term investments at March 31, 2025 was $24 1 million compared to $26 8 million on December 31 2024.
Frank Lorenzo: We used $4 $8 million of cash in operating activities in Q1 compared to $4 1 million in Q1, 2024 and $3 million in Q4 of last year.
Frank Lorenzo: As has been the case in prior years cash outlays in the first quarter will be higher this year than in other quarters, reflecting payments for items that hit our P&L throughout the year.
Frank Lorenzo: Early in Q1, we raised $2 $4 million under our ATM facility by selling approximately 163000 shares at an average price of $15 19.
Frank Lorenzo: Putting us in a comfortable cash position such that we have not needed to access the capital market during the recent volatile months.
Frank Laurencio: For Q2, revenue will depend on timing of wafer shipments to our fabless licensee and will be in the range of $0 to $50,000.
Frank Lorenzo: For Q2 revenue will depend on timing of wafer shipments to our fabulous licensee and will be in the range of zero to $50000.
Frank Laurencio: consistent with our usual practice, we're not providing revenue guidance any further out. The next major revenue milestone under our agreement with ST will occur when they get into formal process qualifying.
Frank Lorenzo: Consistent with our usual practice, we're not providing revenue guidance any further out.
Frank Lorenzo: The next major revenue milestone under our agreement with S. T will occur when they get into formal process qualification.
Frank Laurencio: Moving to expenses. On our last call, I shared that we expected non-GAAP OPEX to be in the range of $17 to $18 million in 2025. Outsource fabrication work, which we used to do at TSI Semiconductor, has now been spread over multiple vendors who can offer specialty services that are more specifically tuned to the range of technology areas that we're working on. We also have lower headcount in sales and marketing, which we're making progress on replacing. I now expect a full year non-GAAP operating expense for 2025 will be in the range of $17.25 to $17.75 million.
Frank Lorenzo: Moving to expenses.
Frank Lorenzo: On our last call I shared that we expected non-GAAP opex to be in the range of $17 million to $18 million in 2025.
Frank Lorenzo: Outsourced fabrication work, which we used to do a tsi semiconductor has now been spread over multiple vendors, who can offer specialty services.
Frank Lorenzo: Or more specifically tuned to the range of technology areas that we're working on.
Frank Lorenzo: We also had lower head count in sales and marketing, which were making progress on replacing.
Frank Lorenzo: I now expect our full year non-GAAP operating expense for 2025 will be in the range of 17.25 to $17 $75 million.
Scott Bibaud: With that, I will turn the call back over to Scott for a few summary remarks before we open the call up to questions. Thank you, Frank. With the announcement of our new partnership. As well as the progress we've made in the last quarter, Atomera is better positioned than ever to deliver important solutions for today's challenging electronic devices. We've worked very hard to build our technology and relationships at all the large semiconductor companies. and we believe that effort will be converted into a significant and sustainable business. I appreciate your support as we work hard to turn this vision into a reality.
Scott Vivo: With that I will turn the call back over to Scott for a few summary remarks before we open the call up to questions.
Frank Lorenzo: Scott.
Scott Vivo: Thank you Frank.
Frank Lorenzo: With the announcement of our new partnership.
Frank Lorenzo: As well as the progress we've made in the last quarter.
Frank Lorenzo: Adam era is better positioned than ever to deliver important solutions for today's challenging electronic devices.
Frank Lorenzo: We've worked very hard to build our technology and relationships at all the large semiconductor companies.
Frank Lorenzo: And we believe that effort will be converted into a significant and sustainable business I. Appreciate your support as we work hard to turn this vision into a reality.
Mike Bishop: Mike, we will now take questions.
Mike: Mike will now take questions.
Mike Bishop: 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 hand button and we may call on you to ask your question live.
Mike: Thank you Scott.
Speaker Change: If you wish to ask a question. Please click the Q&A button at the bottom of the zoom window, then feel free to typing. Your question I will do my best to aggregate the incoming queries and relay them to management. Alternatively, you can click the raise hand button then we may call on you to ask your question lies.
Richard Shannon: And right now, our first question comes from Richard Shannon of Craig Hallam. Go ahead, Richard. Thank you, Mike. And thanks, Scott and Frank, for taking a few of my questions here. I think my first question is going to be on your announcement of, I don't know if this is earlier this week or last week about working with this semi-production equipment company here. I guess a few questions. I'd love to get a sense of, you know, what kind of equipment we're talking about. Scott, I know in the past you've talked about partnering with EpiMakers, Epi machine makers, of which there are three, I believe, that are major ones.
Richard Shannon: And right now our first question comes from Richard Shannon of Craig Hallum Go ahead Richard.
Thank you, Mike and thanks, Scott and Frank or taking a few of my questions here.
Richard Shannon: I think my first question is going to be on your announcement of I don't know if this is earlier earliest weaker last week about working with this.
Richard Shannon: Semi production equipment company here I guess, a few questions love to get a sense of.
Speaker Change: What kind of equipment, we're talking about Scot I know in the past you've talked about partnering with Abbvie makers at the machine makers of which there are three I believe that our major ones I Wonder if you can confirm whether that's it maybe suggest how long you've been working with them to.
Scott Bibaud: I wonder if you can confirm whether that's it. Maybe suggest how long you've been working with them to, you know, establish this sort of relationship. And maybe you can describe the degree to which this partner has skin in the game here to, you know, that's really kind of relaying, you know, a real commitment to working with you in this regard. Yeah. Okay, so.
Speaker Change: Established this sort of relationship and maybe you can describe the degree to which this partner has skin in the game here to really kind of relaying.
Speaker Change: A real commitment to working with you in this regard yeah. Okay.
Speaker Change: Okay. So.
Scott Bibaud: You know, it's always tricky to kind of answer the details about what tools they sell because it pretty much tells you who they are. So I, I think. I'm going to defer a little bit on that, Richard, but I will say that it's a technology that we use very extensively. And this customer or this partner is someone that we've been working closely with for many years. um I think the thing I can comment the most on is your last part of the question. So, you know, there's always, in my remarks, I talked about how customers ask for a lot of data from us, and then when they get that data, they ask for even more.
Speaker Change: No it is.
Speaker Change: Always tricky to kind of answer the details about what tools they sell because it pretty much tells you who they are so.
Speaker Change: I I think.
Richard Shannon: I'm going to defer a little bit on that Richard but I will say that it's it's a technology that we use very extensively.
Richard Shannon: And this customer or this this partner is someone that we've been working closely with her for many years.
Richard Shannon:
Richard Shannon: I think the the thing I can comment the most down into your last part of the question. So you know Theres always.
Richard Shannon: In my in my remarks, I talked about how customers ask for a lot of data from us and then when they get that data they ask for even more and every time they ask for more data it gets to be something it's harder to test for its more expensive to set up.
Scott Bibaud: And every time they ask for more data, it gets to be something it's harder to test for, it's more expensive to set up, find the right type of wafers, process them to a certain point, and then set it up and get that very expensive testing that you need to do to be able to test at the individual transistor level. And we can do some of that ourselves. The big thing here is that our partner company has massively more capabilities than us. and they are, you know, just like everybody, budget constrained on what they can spend their money on.
Richard Shannon: Find the right type of wafers processed them to a certain point and then set it up and get that very expensive.
Richard Shannon: Testing that you need to do to be able to test at the individual transistor level.
Richard Shannon: And we can do some of that ourselves but.
Richard Shannon: The Big thing here is that our partner company has massively more capabilities than us.
And they they are.
Richard Shannon: And I'm, just like everybody budget constrained in what they can spend their money on and so when we would go to them in the past and say Hey, we've got this great customer opportunity, but we really need you to help us.
Scott Bibaud: And so when we would go to them in the past and say, hey, we've got this great customer opportunity but we really need you to help us. You know, spend a whole bunch of time and money with your resources and your equipment and your, you know, capabilities to help us prove this for the customer, their natural reaction would be like, well, what's in it for us, you know? How do we know that if we do all this work for you, you aren't going to just go to production with someone else? And so this partnership is something that we talked about for a long time, where basically you said, if we're going to be developing this technology together with them, then we're going to, we're going to go to production with their tools on that technology.
Richard Shannon: You know spend a whole bunch of time and money with your resources in your equipment and your.
Richard Shannon: Capabilities.
Richard Shannon: <unk> capabilities to help us prove this for the customer.
Richard Shannon: Their natural reaction would be like well what's in it for us.
Speaker Change: How do we know that if we do all this work for you you aren't going to just go to production with someone else.
Speaker Change: And so this partnership is something that we talked about for a long time, we're basically said if we're going to be developing this technology together with them then we're going to we're going to.
Speaker Change: Go to production with their tools on that technology, and we're gonna be upfront working with.
Scott Bibaud: And we're going to be up front working with our end customers that we're doing this on a joint basis. And so, you know, the end solution is on a joint. So, in other words, the skin in the game that that our partner company is adding is that they're putting a bunch of equipment and personnel and engineering resources to help.
Speaker Change: Our and customers that we're doing this on a joint basis and so the end solution is on a joint basis.
Speaker Change: So in other words the skin in the game that our that our partner company is adding is that theyre, putting a bunch of equipped.
Speaker Change: Equipment and personnel and engineering resource to help.
Scott Bibaud: us get the data to be able to win this design and go to production, and it will be with their And I can't remember if you said this or not, Scott, but I just want to confirm, is this work largely focused on leading edge, both logic and DRAM? It's focused on the gate all around, the leading edge. I would say, whenever I talk about advanced nodes, though, I always include the leading memory manufacturers because the work they're doing is also very much bleeding edge. And so the techniques that we come up with for gate all around for logic, for example, are frequently applicable across the memories.
Speaker Change: US get the data to be able to win this design and go to production and it will be with their equipment.
Okay.
Speaker Change: I can't remember if you said this or not Scott, but I just want to confirm is this work largely focused on leading edge, both logic and DRAM.
Speaker Change: It's focused on the gate all around so leading edge.
Speaker Change:
Speaker Change: I would say whenever I talk about advanced nodes, though I always include the the leading memory manufacturers because the work. They're doing is also very much bleeding edge and so the techniques that we come up with four gate all around for logic. For example are frequently applicable across the memories.
Richard Shannon: Okay. Okay, fair enough.
Speaker Change: Okay.
Speaker Change: Okay fair enough, let's jump to another topic here that being SD micro here.
Richard Shannon: Let's jump to another topic here, that being ST micro here. I certainly understand you can only share what you've shared here so far. But an interesting comment you made was that you've got other areas within ST that are starting work with you. So maybe if you can, can you describe what other technology areas or at least describe whether there are areas that you already work with other customers? And is it fair to think, I think you said this, but I just want to make sure that these new divisions or groups within ST micro are doing it directly because of the work that the power of the smart power group has already undertaken, and there's some communication between that suggests they should be working, these new groups should be working on it as well.
Speaker Change: Certainly understand you accumulate share what you've shared here so far but the interesting comments you made was that you've got other areas within S. T that or are starting work with with you. Maybe if you can can you.
Speaker Change: Describe what other technology areas or at least describe whether they're areas that you're already working with other customers and is it fair to think I think you said this but I just want to make sure that these new divisions or groups within IC maker doing it directly because of the work that the power of the smart power group is already undertaken and Theres some communication between that suggests.
Speaker Change: They should be worked these new grocery working onto this one yes.
Scott Bibaud: Yeah, so answer the last part. First, absolutely. I think at the most senior levels of ST, we, at this point, have a lot of credibility. And when a group goes to the SmartPower group and says, hey, we might be interested in MST for another application, what do you think? They say, absolutely, you should work with them. We've got a very, very good working relationship with them. If you look at overall Estee as a company, it's a very big company, and they have products focused in many different areas, but the overlap with what we have is quite high.
Speaker Change: Answer the last part.
Speaker Change: First absolutely I think at the most senior levels of S T.
Speaker Change: We at this point have a lot of credibility and when a group goes to the smart power group and says Hey, we might be interested in MST for another application, where do you think they say absolutely you should work with them.
Speaker Change: We've got a very very good working relationship with them.
Speaker Change: If you look at overall FTE as a company and the very Big company and they and they have products focused in many different areas.
Speaker Change: But the overlap with what we have is quite high they have RF soi products. They have gallium nitride products they have.
Scott Bibaud: They have RFSOI products, they have gallium nitride products, they have They have advanced node products, but not the most advanced nodes, but they have something called fully depleted SOI products, which are, as you probably know, they're kind of like 28 nanometers and below, focused on very low power applications, and they're pretty advanced technologies, and that's something that we could do a lot of work with them in. We're working with SmartPower, but they do power in a number of other different areas that would be overlapped with us, so, you know, it's just an enormous amount of different areas that we can engage with them with.
Speaker Change: Sure.
Speaker Change: They have advanced node products, but not not the most advanced nodes, but from but they have something called.
Speaker Change: Fully depleted soi products, which are as you probably know there kind of like 28 nanometers and below focused on very low power applications and they're pretty advanced technologies and that's something that we can do a lot of work with them in we're working with smart power.
Speaker Change: But but they do.
Power in a number of other different areas that would be overlaps with us. So there's just an enormous amount of.
Different areas that we can engage with them with and and yes. We've a lot of this has been incoming interest some of it has been us reaching out and saying Hey, we know you're working in this area.
Richard Shannon: And yeah, a lot of this has been incoming interest. Some of it has been us reaching out and saying, hey, we know you're working in this area and trying to set up meetings and so forth. But a lot of it has been groups within SD who reach out to us directly and say, we understand your technology and we think it could help us. Okay, very interesting.
Speaker Change: And trying to set up meetings and so forth, but a lot of it has been groups with NFC, who reach out to us directly and say we understand your technology and we think it could help us with something.
Speaker Change: Okay very interesting thanks for that detail maybe.
Richard Shannon: Thanks for that detail.
Richard Shannon: Maybe touching quickly on the topic of RFSOI, I think this is probably the technology area that we've been talking about for the longest. You mentioned customers interested in improving the LNAs and low noise amplifiers, which I'll be honest with you, I don't understand that much other than I know they exist in front-end modules. And you said you've been doing all this work in the past with power switches. Is this been kind of a limitation or a headwind to adoption by RFSOI customers in the past? And this could be that key to unlocking the opportunity here?
Speaker Change: Maybe touching quickly on the topic of RF Soi I think this is probably the technology area that we've been talking about for the longest.
Speaker Change: Mentioned customers interested in improving the <unk> low noise amplifiers, which I'll be honest with you I don't understand that much other than I know they exist and front end modules.
Speaker Change: And you said you've been doing all this work in the past with power switches is this been kind of a limitation or a headwind to adoption by RF soi customers in the past and this could be that key to unlocking the opportunity here or are there can they be can there be other functions within the front end module that you can also impact and therefore.
Scott Bibaud: Or can there be other functions within the front-end module that you can also impact and therefore, finally get one of these guys over the finish line? Because it's been, I don't know, a number of years here, and it's one that I've always thought that would be the first one to go to production. And it's been, I guess, stubbornly not quite there. So, I'm wondering if this work here is that kind of catalyst to move you across the finish line. Yeah. I think on the front-end module, the power switching was the key application that we were first very much focused on and where I would say… There was more development effort by the RFS SOI guides than a lot of other areas.
Speaker Change: Finally get one of these guys over the finish line because it's been.
A number of years here and it's one that I've been I've always thought that would be the first one to go into production and it's been I guess stubbornly.
Speaker Change: Not quite there. So wondering if this work years is that there is that kind of catalyst to move you cross the finish line Yeah, I think on the front end module.
Speaker Change: The power switching was the key application that we were first very much focused on and where I would say.
Speaker Change: There was more development effort by the RFS Ogata.
Speaker Change: Why guide them a lot of other areas.
Scott Bibaud: It was a key competitive advantage that they could have going on in the market. That isn't to say that our technology only worked on the power switching, but that was where our biggest focus with the customers was. We'd run wafers and we'd do testing in that area, and I still think that we have shown a very significant ability to improve power switching. There's a number of other areas in the front end that are important. And what seems to have happened, and I haven't, I don't know exactly where this came from, but I think one of the leading, or maybe several of the leading mobile phone manufacturers, or possibly even a large mobile phone operator, has changed the specifications for their phones to say, we need far better LNA performance.
Speaker Change: It was a.
Speaker Change: A key competitive advantage that they can have going out into the market.
That isn't to say that our technology only worked on the power switching but that was where our biggest focus with the customers was there we'd run wafers and we do testing in that area and I still think that we have shown a very significant ability to improve.
Speaker Change: Power switching but.
Speaker Change: There's a number of other areas in the front end that are important and what seems to have happened and I Havent I don't know exactly where this came from but I think one of the leading or maybe several of the leading mobile phone manufacturers or possibly even among our large mobile phone operator has changed the specifications.
Speaker Change: For their farms to say, we need far better <unk> performance M&A as you know, it's a low noise amplifier. It helps you to receive signals at lower signal strength. So that you can get longer range.
Scott Bibaud: LNA, as you know, it's a low noise amplifier. It helps you to receive signals at lower signal strength. so that you can get longer range. And it just seems like, I don't know. where it came from, but all of our customers are simultaneously asking us about that. And so this seems to be a very hot area. So now we're working with our customers, not just on the power switch, but also on the LNA. And I think because there's a demand for this and there's gonna be a competition to win those designs, I think people will move quickly.
Speaker Change: And.
Speaker Change: And and it just seems like I don't know.
Where it came from but all of our customers are simultaneously asking us about that and so this seems to be a very hot area. So now we're working with our customers not just on the power switch, but also on the M&A and I think I think because there's the demand for this and that's going to be a competition to win those designs I think people will move quickly.
Scott Bibaud: Okay.
Richard Shannon: Well, hopefully from my personal perspective, hopefully it's not Verizon that's asking for these changes because I'd love to get better performance out of my house here.
Speaker Change: Okay.
Speaker Change: Well hopefully from my personal perspective by hopefully a superb Verizon that's asking for these changes because I'd love to get better performance.
Speaker Change: Out of my house here, but I'll say it anyway, but [laughter].
Richard Shannon: But anyway, probably two last questions for me, one for you and one for Frank. So just kind of touching again on the topic of the transformative customers. And Scott, I do want to make sure, I know two calls ago, you talked about a transformative customer that then sounded delayed, but then you mentioned two others on the last call. I think you're referring to the ones on the last call. Yeah, I was referring to the ones on the last call. Okay. And I don't think I took very good notes here.
Speaker Change: The primary two last questions for me one for you on a one for one for Frank So just kind of touching again on the topic of the transformative customers and Scott I do want to make sure I know two calls ago, you talked about a transformative customer that then sounded delayed but then you mentioned two others on the last call I think youre, referring to the ones on the last call I guess.
Speaker Change: Just wondering to the ones on the last call and I don't think I took very good notes here. So I'm going to have to ask you to repeat the kind of the the call.
Scott Bibaud: So I'm going to have to ask you to repeat kind of the call out here with that particular set of two customers there. Can you repeat that for me, please? Yeah. I mean, what I said earlier was that things continue to move really quickly with those guys. And expansively. So they want to do a lot of work with us and they want to do it, you know, very quickly. At least one of them is moving. at a pace that I didn't think that was going to be. I mean, they're moving much, much faster than I expected.
Speaker Change: Call out here with that particular set of two customers. There can you repeat that for me. Please yes, I mean, what I said earlier was.
Speaker Change: Was that things continue to move really quickly with those guys and.
Speaker Change: Expansively so they want to do a lot of work with us.
Speaker Change: And they want to do it.
Speaker Change: No.
Speaker Change: Very quickly.
Speaker Change: At least one of them is moving.
Speaker Change: At a pace that I didn't think that was going to be.
Speaker Change: They're moving much much faster than I expected.
Scott Bibaud: And the other one is also expanding to do a lot more than we had hoped for before.
Speaker Change: And the other one is also.
Speaker Change: The expanding to do a lot more than we had hoped for before so.
Scott Bibaud: So overall, I I would love for us to be able to, you know, make an agreement with these guys so we can start talking about them in some more detail. But but it is something that I'm quite excited. Okay.
Speaker Change: Overall, I I would love for us to be able to make an agreement with these guys. So we can start talking about them in some more detail, but but it is something that we're quite excited about it.
Scott Bibaud: Does the work going on here involve the partner with the Capital Equipment, the unnamed Capital Equipment Company? So we did not get involved with these customers as part of the Capital Equipment Company. Okay.
Speaker Change: Okay does the work going on here in bulk.
Speaker Change: The partner with the <unk>.
Speaker Change: Capital equipment, the unnamed capital equipment company.
Speaker Change: So we did not get involved with these customers.
As part of the capital equipment company.
Scott Bibaud: But one of the things I mentioned about that agreement is that it's going to expand. So we did focus the agreement around Gate All Around.
Speaker Change: But one of the things I mentioned about that agreement is that it's going to expand so.
Speaker Change: We did focus the agreement around gate all around we just wanted to put something in place and.
Scott Bibaud: We just want to put something in place and and make it more focused on parameters such that we could kind of close a deal. But I think this is going to establish a working relationship that we have together, and it's really going to expand to include a whole bunch of our businesses, including possibly.
Speaker Change: And make it more focused on parameters such that we can kind of close the deal, but I think this is going to establish a working relationship that we have together and it's really going to <unk>.
Speaker Change: Expand to include a whole bunch of our businesses, including possibly these two okay.
Frank Laurencio: Frank, a quick question for you. I missed the number that you mentioned in terms of OPEX for this year, and I guess I'd love to understand kind of an exit rate for this year to think about it, because it sounds like you're looking to add headcount here over time or based on some contingencies. I'd love to get a sense of both those numbers, please. Sure. So I gave a range last time of 17 to 18. I basically just narrowed it down to the midpoint of that of $17.25 to $17.75 million non-GAAP operating expense for the year.
Speaker Change: Okay fair enough.
Scott Vivo: Frank a quick question for you I missed the number that you mentioned in terms of Opex for this year and I guess I'd love to understand kind of an exit rate for this year to think about it because it sounds like you're looking to add head count here over time or based on some contingencies. So I'd love to get a sense of both of those numbers. Please.
Frank Lorenzo: Sure So Andrew.
Speaker Change: Sure.
Speaker Change: I gave a range last time, a subsidy to 18 I basically just narrowed it down to the mid point of that of 17 in the quarter to 17 and three quarters million dollars.
Speaker Change: non-GAAP operating expense for the year.
Frank Laurencio: And that's kind of ramping steadily through the year because, as you know, we are down sort of headcount in marketing as compared to last year and even as compared to Q4 last year. So we're recruiting in that area, looking to add there. I think more significantly, we've had, historically when we were working with TSI, we're spending, you know, on average around a million to a million and a half to zero. And it's kind of bounced back and not completely to, you know, the $1.2 million a year that was kind of the historical average. But I could see it kind of approaching that level as we exit the year.
Speaker Change: And that's kind of ramping steadily through the year.
Speaker Change: As you know we are down sort of head count in sales and marketing.
Speaker Change: As compared to last year, and even as compared to Q4 last year.
Speaker Change: So we're recruiting in that area of looking to add there, but I think more significantly.
Speaker Change: We've had.
Speaker Change: Historically, when we were working with Tsi.
Speaker Change: We're spending.
Speaker Change: On average around a million to a $1 million in the quarter with them per year.
Speaker Change: Outsourced fabrication.
Speaker Change: And last year that went nearly to zero.
Speaker Change: It's kind of bounced back and not <unk>.
Speaker Change: Completely too.
Speaker Change: The the $1 2 million a year that was kind of the historical average.
Speaker Change: But I could see it kind of.
Speaker Change: Approaching that level as we as we exit the year.
Richard Shannon: You know, we had a big increase in outsourced R&D as Q1 versus Q1 of last year. You know, the R&D expenses went up by about $300,000. in this first quarter versus last year, and I would consider that to be, you know, kind of more of the normalized, you know, level of R&D spend is what we have this quarter. Maybe ramping up a little bit with more outsourced device fabrication and headcount, but not substantial. Okay, I think that helps me model that. And that's all the questions I have guys, thanks.
Speaker Change: We had a big increase in an outsourced R&D is Q1 versus Q1 of last year.
Speaker Change: The R&D expenses went up by.
Speaker Change: By about $300000.
Speaker Change:
Speaker Change: In this first.
Speaker Change: First quarter versus versus last year, and I would consider that to be.
Speaker Change: Kind of more of a normalized.
Speaker Change: Level of R&D spend is what we have this we have this quarter, maybe ramping up a little bit with more outsourced device fabrication and head count.
Speaker Change: But not substantially.
Speaker Change: Okay, I think that helps me model that that's all the questions I had guys. Thanks. Thanks for your time.
Speaker Change: Sure.
Richard Shannon: Thanks, Richard.
Mike Bishop: And we have a number of questions that have come in on the Q&A text line here, and so I'll just heart them off at you, Scott. In the previous call, you mentioned that two existing customers were planning demos and product areas entirely different from the original engagement scope.
Richard Shannon: Thanks, Richard and we have a number of questions that have come in on the Q&A text line here and so I'll just start them off to you Scott.
Richard Shannon: In the previous call you mentioned that two existing customers, we're planning demos and product areas entirely different from the original engagement scope could you share.
Scott Bibaud: Could you share, you know, they asked for specific customers, but can you share the customers or at least the initial engagement area and describe the new product areas they're planning demos for? Yeah, we, I'm not going to talk about. customers are but I'll give you an idea about some of the areas we've had customers approach us about doing work in 28 nanometer You know, we've always done a lot of work on High K Metal Gate and we believe that we can bring some big advances there. So that's something that we're talking to people about. We are talking to people about.
Richard Shannon: They asked for specific customers, but can you share the customers or at least the initial engagement area and describe the new product areas there planning demos for it.
Richard Shannon: Yes.
Richard Shannon: I'm not going to talk about.
Richard Shannon: Who the customers are but I'll give you an idea about.
Richard Shannon: Some of the areas.
Richard Shannon: We've had customers approach us about doing work in 28 nanometer.
Richard Shannon: We've always done a lot of work on high K metal gate, and we believe that we can bring some big adventures there. So that's something that we're talking to people about we're talking.
Richard Shannon: Sure.
Richard Shannon: To people about.
Scott Bibaud: Fully Depleted RFSOI. We're talking to people about, I mean there's widespread interest in some very specialized applications like Radhard and other things that we're considering doing work on. We're talking to people about different memory applications.
Richard Shannon: Fully depleted RF Soi, we're talking to people about.
Richard Shannon: I mean there is.
Richard Shannon: Widespread interest in some very specialized applications like.
Richard Shannon: Rad hard and other things that we're considering doing work on we're talking to people about different memory applications, but and that's just scratching the surface in a it's not unusual that when we meet with a customer.
Scott Bibaud: And that's just scratching the surface, you know. It's not unusual that when we meet with a customer in the early meetings. They like to have kind of a CTO level person in the meeting who understands all of the different product areas. When they understand what MST can do, they say, aha, maybe it'd be good for you to talk to these guys because I know they need help in this area and that other group and that other group. So, you know, we have a lot of discussions around.
Richard Shannon: In the early meetings, they like to have kind of a CTO level person in the meeting who understands all of the different product areas when they understand.
Richard Shannon: <unk> MST can do they say maybe it would be good for you to talk to these guys because I know they need to.
Richard Shannon: They need help in this area and that other group in that other group. So we have a lot of discussions around.
Scott Bibaud: different technology areas, we don't really consider them that serious until we start getting an NDA in place and start planning to actually do demo runs together. But there's there's interest in a number of. Great, thank you.
Richard Shannon: Different technology areas.
Richard Shannon: It's.
Richard Shannon: We don't really consider them that serious until we start getting an NDA in place and start planning to actually do demo runs together.
Richard Shannon: But there's there's interest in a number of areas.
Richard Shannon: Great. Thank you.
Scott Bibaud: And another one is, you know, what are the implications of the recently restated employment agreement that no longer provide severance upon change of control so that we filed that in an SEC document? So it's what are the implications of that? Yeah, so I think the implication is that we we screwed up. Our executive employment agreements expired at the end of last year and we put new ones in place and we wanted to have a double trigger change of control provision which has kind of become standard in the industry. All of our executives had that for some reason in mind.
Richard Shannon: And.
Speaker Change: Another one is what are the implications of the recently restated employment agreement.
Richard Shannon: That no longer provides severance upon.
Richard Shannon: Change of control so that we filed that in a SEC documents.
Speaker Change: What are the implications of that.
Richard Shannon: Yes, so I think the implication is that we screwed up.
Richard Shannon: Our executive employment agreements.
Speaker Change: Ah expired at the end of last year, and we put new ones in place and we wanted to have a double trigger change of control provision, which has kind of become standard in the industry. All of our executives had that for some reason in mind. There were some extra words in there that should have been deleted that Seth.
Scott Bibaud: There were some extra words in there that should have been deleted that said, basically that said, I would it would change it to a single trigger but those were that was a mistake. We published it. It was pointed out to us. We had our lawyers redraft it and we resubmitted it. There's no bigger message than that, isn't there?
Richard Shannon: Ed.
Speaker Change: Basically that said I would.
Speaker Change: It would change it to a single trigger but those were that was a mistake. We published it it was pointed out to us.
Speaker Change: We had our lawyers redrafted and we we resubmitted it theres no.
Speaker Change: There's no bigger message than that isn't that we wanted to do the right thing and we messed up a little bit, but we fixed it.
Scott Bibaud: We wanted to do the right thing and we messed up a little bit.
Scott Bibaud: Okay, thank you.
Speaker Change: Okay. Thank you.
Scott Bibaud: And another question regarding FT micro and the question is whether the the current timeline is influenced because they went back and started doing phase three work similar to JDA one. I've spoken before about the type of work they're doing. They're doing, I would say, broadly speaking, they're doing two parallel types of work. They're doing, you know, always trying to optimize the performance of the device by using, doing TCAD and running wafers and testing the results. And in parallel with that, they're doing a lot of work towards productization, minimizing, I mean, maximizing yield and throughput and so forth.
Speaker Change: And another question regarding ft micro and the question is whether the current timeline is influenced because they went back and started doing phase three work similar to J D. One.
Speaker Change: I've spoken before about the type of work Theyre doing theyre doing I would say broadly speaking the doing two parallel types of work they're doing.
Speaker Change: You know always trying to optimize the performance of the device by using during tea CAD and <unk>.
Speaker Change: And running wafers and testing the results and.
Speaker Change: In parallel with that Theyre doing a lot of work towards.
Speaker Change: Product ization, minimizing I mean, maximizing yield and throughput and so forth and we've been working very hard with S. T and both of those technologies for quite a while.
Scott Bibaud: And we've been working very hard with STN, both of those technologies for quite a while. I can't say exactly where they are, but It's true that in phase three, we also do optimization work like that, but this is the work that we've been talking about. SC doing within their phase four.
Speaker Change: Can't say exactly where they are but.
Speaker Change: <unk>.
Speaker Change: It's true that in phase III, we also do optimization work like that but this is the work that we've been talking about.
Speaker Change: S T doing within their phase four.
Scott Bibaud: Okay, and what is the current status of the of the transformative customer that was mentioned prior last quarter conference call that the deal that? Yeah, so this this quarter we continue to have discussions with that customer. I won't say we have anything to report by the time of this earnings call, but lines of communication are still open.
Speaker Change: Okay, and what is the current status of the of the transformative customer that was mentioned prior.
Speaker Change: Last quarter conference call that the deal that service.
Speaker Change: So this.
Speaker Change: This quarter, we continue to have discussions with that customer I wont say, we have anything to report by the time of this earnings call but.
Speaker Change: The lines of communication are still open.
Scott Bibaud: Okay.
Speaker Change: Okay.
Scott Bibaud: And on the last call you said that electrical results from Sandia Lab were imminent, and how did those early results look? Yeah, we I would say there was some delay at late last year when we it took us longer to get those electrical results than we expected. We do have them now. I said a few things about them on the call and the results of the of the. electrical results show improved device performance. That's pretty consistent with what we're seeing at the level of improvement that we were seeing in terms of the physical improvement, the quality improvement of the GAN device itself, and our electrical device is kind of validating those improvements.
Speaker Change: And on the last call you said that electrical results from Sandy lab or imminent and how did those early results look.
Speaker Change: Yeah, we I would say there was some delay at late last year when we.
Speaker Change: It took us longer to get those electrical results than we expected. We do have them now I said, a few things about them on the call and the results of the.
Speaker Change: Of the.
Speaker Change: Electrical results show improved device performance, that's pretty consistent with what we're seeing is the level of improvement that we were seeing in terms of the physical improvement the quality improvement of the Gan device itself in our electrical device.
Speaker Change: Is kind of validating those improvements what I would I mean, the next step for US is obviously to do some optimization to see if we can get those to be improved a lot more and even with the results that we have today. We are just in the early days of testing those and our goal is to do enough work to get a really a full suite of electrical data that we can.
Scott Bibaud: What I would, I mean, the next step for us is obviously to do some optimization to see if we can get those to be improved a lot more. And even with the results that we have today, we are just in the early days of testing those and our goal is to do enough work to get a really a full suite of electrical data that we can bring out to customers and that's when they'll be really ready to start doing more work. I think at this time last year we believed that we would go out to customers with the physical results showing improved strain within the GAN device and improved quality on the surface, less bow, and some other things.
Speaker Change: And bring out to customers and that's when they'll be really ready to start doing more work I think at this time last year. We believed that we would go out to customers.
Speaker Change: With the with.
Speaker Change: With the physical results showing improved.
Speaker Change: Strain within the Gan device and improved.
Speaker Change: Quality on the surface.
Speaker Change: Less bow and some other things.
Scott Bibaud: But it turns out that just that physical result was not enough for customers to adopt. We needed to have electrical results, and so that's what we're starting to get now, and hopefully we'll get a lot more of that.
Speaker Change: But it turns out that just that physical result was not enough for customers to adopt we needed to have electrical results and so that's what we're starting to get now and hopefully we'll get a lot more of that in the near future.
Scott Bibaud: Great, thank you.
Speaker Change: Great. Thank you.
Scott Bibaud: And with regard to the partnership with the Capital Equipment Company, what's the business model look like between the two companies? Is it a royalty model or some other arrangement? Yeah, and I and I did say this in our in our prepared remarks, we there's no no change to our business model. We're not sharing royalties where there's no really material impact to what we've always talked about of our business model in essence. You know, they're helping us in many ways, both with. developing the material to sell to customers and also selling in conjunction with them and in exchange we'll we'll be telling the customer that this is a partnership and we're going to go to production together as well.
And with regard to the partnership with the capital equipment company, what's the.
Speaker Change: Business model look like between the two companies.
A royalty model or some other arrangement.
Speaker Change: Yeah, and I did say this in our in our prepared remarks, we theres no no change to our business model.
Speaker Change: We're not sharing royalties where theres no.
Speaker Change: Really material impact to what we've always talked about of our our business model.
Speaker Change: In essence.
Speaker Change: They're helping us in many ways both with.
Speaker Change: Developing the materials sell to customers and also selling in conjunction with them in an exchange will.
Speaker Change: We will be telling the customer that this is a partnership and we're going to go to production together as well.
Scott Bibaud: Great.
Mike Bishop: And with that, Scott, that concludes the questions here.
Speaker Change: Great and with that Scott that concludes the questions. Here. So you may proceed with closing remarks.
Scott Bibaud: So you may proceed with closing remarks. All right. Well thank you all again very much for joining us to hear the progress we are making here within Atomera. Please continue to look forward to our news articles and blog posts which are available along with the investor alerts on our website atomera.com. Should you have additional questions please contact Mike who will be happy to follow up. Thanks again for your support and we really look forward to our next update call. Thank you.
Speaker Change: Alright.
Speaker Change: Well.
Speaker Change: Thank you all again very much for joining us to hear the progress we're making here within at Emera. Please continue to look forward to our news articles and blog posts, which are available along with investor alerts on our website at <unk> Dot Com should you have additional questions. Please contact Mike who will be happy.
Speaker Change: To follow up.
Speaker Change: Thanks again for your support and we really look forward to our next update call with you.
Speaker Change: Thank you. This concludes the first quarter 2025 at America Prince call.
Operator: This concludes the first quarter 2025 Atomeric. Goodbye.
Speaker Change: Goodbye.