What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-04 compared with 2024-02-15 · 314 added, 252 removed, 583 unchanged (49% of the section changed)

4 unchanged sentences

Statements of Operations for the years ended December 31, 2024 and 2023

Statements of Comprehensive loss for the years ended December 31, 2024 and 2023

Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023

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We have audited the accompanying balance sheets

of Atomera Incorporated (the “Company”) as of December 31, 2023 and 2022, the related statements of operations, stockholders’

equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to

as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years

in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

of Atomera Incorporated (the “Company”) as of December 31, 2024 and 2023, the related statements of operations, comprehensive

loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes

(collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all

material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash

flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in

the United States of America.

Basis for Opinion

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

Our audits included performing procedures to

assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

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We have served as the Company’s auditor since 2015.

February 15, 2024

March 4, 2025

Atomera Incorporated

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Short-term investments

Accounts receivable

Unbilled contracts receivable

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Current financing lease liability

Deferred revenue

Total current liabilities

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Additional paid-in capital

Other comprehensive income

Accumulated deficit

1 unchanged sentence

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of

these financial statements.

The accompanying notes are an integral part of these

financial statements.

Atomera Incorporated

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Weighted average number of common shares outstanding, diluted

The accompanying notes are an integral part of

these financial statements.

The accompanying notes are an integral part of these

financial statements.

Atomera Incorporated

Statements of Comprehensive Loss

(in thousands)

Unrealized gain on available-for-sale securities

The accompanying notes are an integral part of these

financial statements.

Atomera Incorporated

Statements of Stockholders’ Equity

(in thousands)

Total Stockholders’

Comprehensive

Stockholders’

Balance January 1, 2023

1 unchanged sentence

Stock-based compensation

Stock option exercises

At-the-market sale of stock, net of commissions and expenses

Stock option exercise

Forfeiture of restricted stock

At-the-market sale of stock, net

of commissions and expenses

Balance December 31, 2023

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Stock option exercises

Forfeited restricted stock awards

At-the-market sale of stock, net of commissions and expenses

Forfeiture of restricted stock

At-the-market sale of stock, net

of commissions and expenses

Unrealized gain on available-for-sale

Balance December 31, 2024

$ ( 221,520 )

The accompanying notes are an integral part of

these financial statements.

The accompanying notes are an integral part of these

financial statements.

Atomera Incorporated

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Changes in operating assets and liabilities:

Accounts receivable

Unbilled contracts receivable

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Operating lease liability

Deferred revenue

Net cash used in operating activities

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Maturity of available-for-sale securities

Net cash used in investing activities

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

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Proceeds from exercise of stock options

Proceeds from stock sales

Payments of principal for financing lease

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

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Cash paid for taxes

The accompanying notes are an integral part of

these financial statements.

The accompanying notes are an integral part of these

financial statements.

Atomera Incorporated

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12, 2016, the Company changed its name to Atomera Incorporated.

Atomera is an early-stage

company, having only recently begun limited revenue-generating activities, and is devoting substantially all its efforts toward technology

research and development and to commercially licensing its technology to designers and manufacturers of integrated circuits.

operates as one business segment.

Atomera is an early-stage company,

having only recently begun limited revenue-generating activities, and is devoting substantially all its efforts toward technology research

and development and to commercially licensing its technology to designers and manufacturers of integrated circuits.

LIQUIDITY AND MANAGEMENT PLANS

At December 31, 2023, the

Company had cash, cash equivalents and short-term investments of approximately $ 19.5 million and working capital of approximately $ 16.6

At December 31, 2024, the Company

had cash, cash equivalents and short-term investments of approximately $ 26.8 million and working capital of approximately $ 23.5 million .

The Company has generated only limited revenues since inception and has incurred recurring operating losses.

Accordingly, it

is subject to all the risks inherent in the initial organization, financing, expenditures, and scaling of a new business that is not generating

positive cashflow.

On May 31, 2022, Atomera

entered into an Equity Distribution Agreement with Oppenheimer & Co.

and Craig-Hallum Capital Group LLC, as agents, under

which the Company may offer and sell, from time to time at its sole discretion, shares of its $0.001 par value common stock, in

“at the market” offerings to or through the agent as its sales agent, having aggregate offering proceeds of up to $50.0

million (the “ATM Facility”).

During the year ended December 31, 2023, the Company sold approximately 1.8

million shares pursuant to the ATM at an average price per share of approximately $ 7.97 ,

resulting in approximately $ 13.5

million of net proceeds to the Company after deducting commissions and other offering expenses.

Based on the funds it has

available as of the date of the filing of this report, the Company believes that it has sufficient capital to fund its current business

plans and obligations over, at least, 12 months from the date that these financial statements have been issued.

The Company’s future

capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully

Accordingly, it is subject

to all the risks inherent in the initial organization, financing, expenditures, and scaling of a new business that is not generating positive

On May 31, 2022, Atomera entered

into an Equity Distribution Agreement with Oppenheimer & Co.

and Craig-Hallum Capital Group LLC, as agents, under which the Company

may offer and sell, from time to time at its sole discretion, shares of its $0.001 par value common stock, in “at the market”

offerings to or through the agent as its sales agent, having aggregate offering proceeds of up to $50.0 million (the “ATM Facility”).

During the year ended December 31, 2024, the Company sold approximately 4.1 million shares pursuant to the ATM at an average price per

share of approximately $ 5.38 , resulting in approximately $ 21.3 million of net proceeds to the Company after deducting commissions and

other offering expenses.

Based on the funds it has available

as of the date of the filing of this report, the Company believes that it has sufficient capital to fund its current business plans and

obligations over, at least, 12 months from the date that these financial statements have been issued.

The Company’s future capital

requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully

commercialize its technology, competing technological and market developments, and the need to enter into collaborations with other companies

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Basis of Presentation

The financial statements are

presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect

the financial position, results of operations and cash flows for all periods presented.

The financial statements are presented

in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect the financial

position, results of operations and cash flows for all periods presented.

The Company operates as one business segment.

Fair Value of Financial Instruments

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fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories:

Level 1 — Quoted prices (unadjusted) in active markets

for identical assets and liabilities.

Level 1 — Quoted prices (unadjusted) in active markets for

identical assets and liabilities.

Level 2 — Inputs other than Level 1

1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted

quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data

for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by

little or no market activity and that are significant to the fair value of the assets or liabilities.

Cash and Cash Equivalents

The Company maintains its

operating accounts in a single reputable financial institution.

The balances are insured by the U.S.

Federal Deposit Insurance Corporation

(“FDIC”) up to specified limits.

The Company’s cash and cash equivalents are maintained in checking accounts and money

market funds with maturities of less than three months when purchased, which are readily convertible to known amounts of cash.

that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted

prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially

the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little

or no market activity and that are significant to the fair value of the assets or liabilities.

Cash, Cash Equivalents, and Short-Term Investments

The Company considers all

highly-liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents.

Cash equivalents

may be invested in money market funds or U.S.

agency bonds.

Cash and cash equivalents are carried at cost, which approximates their fair

The Company's portfolio of

short-term investments is comprised solely of U.S.

treasury bills and agency bonds with maturities of more than three months, but less

than one year.

The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period

The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements.

These debt securities are classified as current assets in the condensed balance sheets and recorded at fair value, with unrealized gains

or losses included in accumulated other comprehensive income (loss).

Gains and losses are recognized

when realized.

Gains and losses are determined using the specific identification method and are reported in other income, net in the condensed

statements of operations when incurred.

Unrealized gains and losses are included in other comprehensive income (loss) on the condensed

balance sheets.

Concentration of Credit Risk and Major Customers

Financial instruments, which

potentially subject the Company to concentrations of credit risk, consist principally of cash, cash equivalents, short-term investments

and accounts receivable.

One customer represented 100 % of revenue during the year ended December 31, 2023.

Financial instruments, which potentially

subject the Company to concentrations of credit risk, consist principally of cash, cash equivalents, short-term investments and accounts

One customer represented 63 % of revenue and another customer represented 37 % of the Company’s revenue during the year

ended December 31, 2024.

During the year ended December 31, 2023, 100 % of our revenue was from one customer.

At times, the amounts on deposit

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balances were in excess of insured limits maintained at the financial institution.

Accounts Receivable and Unbilled Contracts

The Company grants credit

to its business customers.

Accounts Receivable and Unbilled Contracts Receivable

The Company grants credit to its

business customers.

Collateral is generally not required for trade receivables.

The Company maintains allowances for potential

credit losses when necessary.

Trade accounts receivable and unbilled contracts receivable are recorded net of allowances for cash discounts

for prompt payment, doubtful accounts, and sales returns.

The Company’s policy

is to reserve for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable

The Company maintains allowances for potential credit

losses when necessary.

Trade accounts receivable and unbilled contracts receivable are recorded net of allowances for cash discounts for

prompt payment, doubtful accounts, and sales returns.

The Company’s policy is

to reserve for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable

and unbilled contracts receivable accounts under Accounting Standards Update (“ASU”) No.

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the potential for recovery is considered remote.

At December 31, 2023 and 2022, there were no allowances for doubtful accounts since the

balances were collected during the year.

At December 31, 2023, there was no allowance against the unbilled contracts receivable account

as the Company deems the balance fully collectible.

At December 31, 2024 there were no allowances for doubtful accounts as the Company deems

the balance fully collectible.

At December 31, 2023, there was no allowance against the unbilled contracts receivable account as the Company

deems the balance fully collectible.

Impairment of Long-lived Assets

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of the license includes customer acceptance.

For recognizing integration

service revenue from integration license agreements, the Company assesses (i) whether the license grant is distinct from or combined with

the transfer of goods or services and (ii) whether the license is a right to access intellectual property or a right to use the intellectual

For recognizing integration service

revenue from integration license agreements, the Company assesses (i) whether the license grant is distinct from or combined with the

transfer of goods or services and (ii) whether the license is a right to access intellectual property or a right to use the intellectual

For licenses that are not distinct, but combined with other goods or services, the revenue is recognized at a point in time

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licenses are granted on a monthly basis and revenue is recognized over time.

Deferred revenues consist

of unearned amounts that have been billed to the customer in advance of the Company’s performance obligations.

These amounts have

not yet been recognized as revenue.

Deferred revenues consist of unearned

amounts that have been billed to the customer in advance of the Company’s performance obligations.

These amounts have not yet been

recognized as revenue.

Revenue for these items will be recognized in accordance with the Company’s revenue policy.

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allowance is recorded on deferred tax assets unless realization is considered more likely than not.

The Company evaluates its

tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions

The Company evaluates its tax

positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions

are “more-likely-than-not” of being sustained by the applicable tax authority.

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Use of Estimates

The preparation of financial statements in conformity with GAAP requires

the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the

reporting period.

Significant estimates are used when accounting for the fair value of stock-based compensation,

borrowing rates used for lease accounting and valuation allowance against deferred tax assets.

Actual results could differ from those

The preparation of financial statements

in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenue and expenses during the reporting period.

Significant estimates are used when accounting for the fair value of stock-based

compensation, borrowing rates used for lease accounting and valuation allowance against deferred tax assets.

Actual results could differ

from those estimates.

Subsequent Events

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Adoption of Recent Accounting Standards

In November 2023, the

FASB issued ASU, No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU

The new guidance requires the disclosure of significant segment expenses even if the entity is a single reportable

This guidance applies to all public entities and is effective for all annual periods beginning after December 15, 2023 and

for interim periods beginning after December 15, 2024.

The Company adopted this standard on January 1, 2024 and it did not have a

material impact on its financial position, results of operations or financial statement disclosure.

In November 2023, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable

Segment Disclosures .

The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced

disclosures about significant segment expense categories included in each reported measure of a segment's profit or loss on an interim

and annual basis.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The update should be applied retrospectively to all

prior periods presented in the financial statements.

The Company adopted this standard during the year ended December 31, 2024.

While the standard requires

additional disclosures related to the Company’s reportable segments in its reporting, the adoption did not have a material impact

on the Company’s financial position, results of operations or financial statement disclosures.

(See Note 11.)

Recent Accounting Standards

In November 2024, the FASB issued

ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of

Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes

to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026,

and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company does not believe ASU 2024-03 will

have a material impact on its financial position, results of operations or financial statement disclosure.

In December 2023, the FASB

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CASH EQUIVALENTS AND INVESTMENTS

Company’s cash, cash equivalents and short-term investments that were measured at fair value on a recurring basis as Level 1 assets,

classified by security type as of December 31, 2023 and 2022 consisted of the following (in thousands):

Schedule of cash equivalents and investments

The Company’s

cash, cash equivalents and short-term investments that were measured at fair value on a recurring basis as Level 1 assets, classified

by security type as of December 31, 2024 and 2023 consisted of the following (in thousands):

Schedule of cash equivalents and short-term investments

December 31, 2024

Money market funds

US agency bonds

December 31, 2023

Money market funds

US treasury bills

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license agreements and from MSTcad licenses are recognized over a period of time.

The following table provides information about

disaggregated revenue by primary geographical markets and timing of revenue recognition for the years ended December 31, 2023 and 2022

(in thousands):

Schedule of disaggregated revenue and timing of revenue

The following table provides information about disaggregated

revenue by primary geographical markets and timing of revenue recognition for the years ended December 31, 2024 and 2023 (in thousands):

Schedule of disaggregated

revenue by primary geographical markets and timing of revenue recognition

Year Ended December 31,

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received more than one year from the reporting date.

The Company records deferred revenue for customers that were issued invoices, but

the Company has not yet recognized the revenue based on its revenue recognition policy.

As of December 31, 2024, the Company has approximately

$ 4 ,000 of deferred revenue that it expects to recognize over the next month.

BASIC AND DILUTED LOSS PER SHARE

Basic net loss per share is

calculated by dividing the net loss by the weighted-average number of shares outstanding for the period.

Diluted net loss per share is

computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock

outstanding and the dilutive common stock equivalent shares outstanding during the period.

The Company’s potentially dilutive common

stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants

and (ii) vesting of restricted stock units and restricted stock awards, are only included in the calculation of diluted net loss per share

when their effect is dilutive.

Since the Company has had net losses for all periods presented, all potentially dilutive securities are

anti-dilutive.

Accordingly, basic and diluted net loss per share are equal.

Basic net loss per share is calculated

by dividing the net loss by the weighted-average number of shares outstanding for the period.

Diluted net loss per share is computed by

dividing the net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding

and the dilutive common stock equivalent shares outstanding during the period.

The Company’s potentially dilutive common stock equivalent

shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants and (ii) vesting

of restricted stock units and restricted stock awards, are only included in the calculation of diluted net loss per share when their effect

Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive.

basic and diluted net loss per share are equal.

The following potential common

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Schedule of property and equipment

Laboratory equipment

Computer equipment

Laboratory equipment

Furniture and fixtures

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Depreciation and amortization

expense relating to property and equipment was approximately $ 77,000 for each of the years ended December 31, 2023 and 2022.

depreciates computer equipment, laboratory equipment and office equipment on straight-line basis over three years.

Furniture and fixtures

are depreciated on a straight-line basis over five years.

The Company amortizes software on straight-line basis over three years.

improvements are amortized over the remaining life of the lease.

The Company leases corporate

office space in Los Gatos, California.

In August 2020, the Company and its landlord amended the lease for this office.

The amendment extended

the expiration date of the operating lease to January 2026 and increased the space from 3,396 square feet to 4,101 square feet.

ASC 842, the lease amendment was treated as a separate lease for the new space and a modification of the lease for the original space.

In January 2021 the additional space became available for use, and the Company recorded an additional ROU asset and corresponding liability

of approximately $ 144,000 .

The lease liability is based on the present value of the minimum lease payments, discounted using the Company’s

estimated incremental borrowing rate at lease inception of 5.25 %.

The lease contains escalating payments on the anniversary of the original

commencement which are included in the measurement of the initial lease liability.

Additional payments based on a change in the Company’s

share of the operating expenses, including property taxes and insurance, are recorded as a period expense when incurred.

In March 2021, the Company

began leasing 474 square feet of office space in Tempe, Arizona.

The new lease is classified as an operating lease with an initial term

of two years and an option to extend for an additional three years through February 2026.

The renewal option was exercised in January

The lease also contains a performance standard for research collaboration with Arizona State University.

The agreement requires

a minimum value of collaborative research in each year of the lease.

The lease is accounted for under ASC 842 and accordingly, the research

payments are included in the ROU and lease liability at commencement.

Effective May 1, 2023, the Company leased an additional 404 square

feet at its Tempe office location under an amendment to its current lease.

The monthly rent payment increased from $1,277 per month to

$2,365 per month and the increased rent under the amended lease is accounted for as a modification to the lease under ASC 842 at the time

of commencement.

At the effective date of the lease amendment, a right-of-use asset of approximately $ 33,000 was recorded along with a

short-term operating lease liability of approximately $ 12,000 and long-term operating lease liability of approximately $ 21,000 .

lease ends in February 2026.

In October 2019, the Company

entered into an agreement to lease a tool for use in the development of the Company’s technology.

The lease agreement established

a monthly lease payment of $150,000 per month.

The lease contains a provision for an annual adjustment of lease payments based on tool

availability and usage during the preceding 12 months and the adjusted payment is calculated on August 1 of each year of the lease.

August 1, 2022, the lease payments for this tool were reduced to $100,824 per month for the period August 1, 2022 through July 31, 2023.

This adjustment to the lease payments resulted in a reduction in the ROU and corresponding lease liability.

Effective August 1, 2023,

the lease payments for this tool were adjusted to $137,650 per month for the period August 1, 2023 through July 31, 2024.

This adjustment

to the lease payments also resulted in a reduction in the ROU and corresponding lease liability.

expense relating to property and equipment was approximately $ 54,000 and $ 77,000 for the years ended December 31, 2024 and 2023, respectively.

The Company depreciates computer equipment, laboratory equipment and office equipment on straight-line basis over three years.

and fixtures are depreciated on a straight-line basis over five years.

The Company amortizes software on straight-line basis over three

Leasehold improvements are amortized over the remaining life of the lease.

The Company accounts for leases

over one year under ASC 842.

Lease expense for the Company’s operating leases consists of the lease payments recognized on a straight-line

basis over the lease term.

Expenses for the Company’s financing leases consists of the amortization expenses recognized on a straight-line

basis over the lease term and interest expense.

The Company’s lease agreement for a tool used in the development and marketing of

the Company’s technology established a monthly lease payment of $150,000 per month.

The lease contains a provision for an annual

adjustment of lease payments based on tool availability and usage during the preceding 12 months and the adjusted payment is calculated

on August 1 of each year of the lease.

Effective August 1, 2023, the lease payments for this tool were adjusted to $137,650 per month

for the period August 1, 2023 through July 31, 2024.

This adjustment to the lease payments also resulted in a reduction in the ROU and

corresponding lease liability.

Effective August 1, 2024, the lease payments for this tool were adjusted to $124,071 per month for the

period August 1, 2024 through July 31, 2025.

This adjustment to the lease payments also resulted in a reduction in the ROU and corresponding

lease liability.

Effective May 1, 2023, the Company

leased an additional 404 square feet at its Tempe office location under an amendment to its current lease.

The monthly rent payment increased

from $1,277 per month to $2,365 per month and the increased rent under the amended lease is accounted for as a modification to the lease

under ASC 842 at the time of commencement.

At the effective date of the lease amendment, a right-of-use asset of approximately $ 33,000

was recorded along with a short-term operating lease liability of approximately $ 12,000 and long-term operating lease liability of approximately

The amended lease ends in February 2026.

In December 2024, the Company

entered into a lease agreement for a tool in Tempe, Arizona.

The term of this lease is for six months beginning on January 1, 2023 with

an option to extend the lease for an additional six months.

The initial lease terms were $96,000 per month.

In March 2023, the Company

elected to extend the lease through December 31, 2023 and in consideration for this extension the remaining lease payments were reduced

Since the lease and extension are not for more than one year, the future lease payments are not included in the lease obligations

on the Company’s condensed balance sheets.

The Company terminated its

office lease in Cambridge, Massachusetts as of March 31, 2023.

The cost of the lease was $2,942 per month.

Lease expense for operating

leases consists of the lease payments recognized on a straight-line basis over the lease term.

Expenses for financing leases consists

of the amortization expenses recognized on a straight-line basis over the lease term and interest expense.

The components of lease costs

were as follows (in thousands):

Schedule of components of lease costs

The term of this lease is for 12 months beginning on January 1, 2025 for

$95,000 per month.

Since the lease term is not for more than one year and there are no extension provisions in the lease, the future lease

payments are not included in the lease obligations on the Company’s balance sheets.

Lease expense for operating leases

consists of the lease payments recognized on a straight-line basis over the lease term.

Expenses for financing leases consists of the

amortization expenses recognized on a straight-line basis over the lease term and interest expense.

The components of lease costs were

as follows (in thousands):

Schedule of lease costs

Year Ended December 31,

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information and non-cash activity related to the Company’s operating and financing leases (in thousands):

Schedule of supplemental

information and non-cash activity related to operating and financing leases

Schedule of supplemental information and non-cash activity

Year Ended December 31,

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COMMITMENTS AND CONTINGENCIES

The Company may be involved,

from time to time, in legal proceedings and claims arising in the ordinary course of its business.

The Company may be involved, from

time to time, in legal proceedings and claims arising in the ordinary course of its business.

Such matters are subject to many uncertainties

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STOCKHOLDERS’ EQUITY

The Company is authorized

to issue to up 2,500 ,000 shares of preferred stock, $ .001 par value.

As of December 31, 2023, and 2022, no shares have been designated

and no shares are issued and outstanding.

Preferred stock may rank prior to common stock with respect to dividends rights, liquidation

preferences, or both, and may have full or limited voting rights.

The Company is authorized to issue

up to 2,500 ,000 shares of preferred stock, $ 0.001 par value.

As of December 31, 2024, and 2023, no shares have been designated and no shares

are issued and outstanding.

Preferred stock may rank prior to common stock with respect to dividends rights, liquidation preferences,

or both, and may have full or limited voting rights.

On May 31, 2022, Atomera entered

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During the year ended December 31, 2024, approximately

1.8 million shares were sold at an average price per share of approximately $ 7.97 , resulting in approximately $ 13.5 million of net proceeds

to us after deducting commissions and other offering expenses.

As of December 31, 2023, the Company has remaining capacity on the ATM

of approximately $ 29.8 million .

As of December 31, 2023, the

Company has reserved approximately 3.4 million shares of common stock for issuance pursuant to outstanding stock options.

4.1 million shares were sold at an average price per share of approximately $ 5.38 ,

resulting in approximately $ 21.3 million of net proceeds to us after deducting commissions and other offering expenses, which totaled approximately $ 663,000 .

As of December 31, 2024, the Company has

remaining gross capacity on the ATM of approximately $ 7.7 million and proceeds to the Company would be reduced by commissions and other offering costs.

On April 28, 2024, the Company

sold 2,247 shares of its common stock to the Chief Executive Officer, Scott Bibaud, at a price of $ 4.45 per share, which was determined

to be the fair market value on the date of the transaction.

The total proceeds from the sale amounted to approximately $ 10,000 .

As of December 31, 2024, the Company

has reserved approximately 3.9 million shares of common stock for issuance pursuant to outstanding stock options.

The Company operates as a single

operating segment.

The Company's chief operating decision maker ("CODM") is its chief executive officer and chief financial

officer who review financial information.

The CODM uses total operating expense, operating margin and related impact on cash consumption

to assess financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating decisions,

such as the determination of the overall headcount, allocation of headcount, research and development expenditures, licensing and royalty

rates offered to customers and capital expenditure commitments.

The measure of assets are reported on the accompanying balance sheets

as total assets.

The following table presents selected financial information with respect

to the Company’s single operating segment for the years ended December 31, 2024 and 2023:

Schedule of selected financial information

Less expenses (1) :

Employee related expenses

Stock-based compensation

Tool related expenses

Consulting expenses

Metrology and other outsourced research expenses

Intellectual property related expenses

Other operating items (2)

Operating margin

Other income (expense), net

classified as cost of revenue are included in the line items presented and not as a separate category.

Other operating expenses include items not listed above separately.

These include travel and entertainment, professional

development, information technology costs, office related costs, depreciation, other research and development costs, other sales and marketing

costs and other general and administrative costs.

STOCK-BASED COMPENSATION

The Company’s 2007 Equity

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Forfeitures are recognized when realized.

The fair value of employee

stock options issued was estimated using the following weighted-average assumptions:

The fair value of employee stock

options issued was estimated using the following weighted-average assumptions:

Schedule of weighted-average assumptions

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Expected dividend yield

The risk-free interest rate

was obtained from U.S.

The risk-free interest rate was

obtained from U.S.

Treasury rates for the applicable periods.

The Company’s expected volatility was based upon the historical

volatility of the Company.

The expected life of the Company’s options was determined using the simplified method as a result of

limited historical data regarding the Company’s activity.

The dividend yield considers that the Company has not historically paid

dividends and does not expect to pay dividends in the foreseeable future.

The Company’s expected volatility was based upon the historical volatility

of the Company.

The expected life of the Company’s options was determined using the simplified method as a result of limited historical

data regarding the Company’s activity.

The dividend yield considers that the Company has not historically paid dividends and does

not expect to pay dividends in the foreseeable future.

The following table summarizes

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table summarizes restricted stock activity (in thousands except per share data):

Schedule of restricted

stock activity

Schedule of restricted stock activity

Number of Shares

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International

The Company had $ 0 current

income tax expense for the years ended December 31, 2023 and 2022, respectively.

The Company accounts for income taxes in accordance with

ASC 740, which requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an

asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits

The Company had $ 0 current income

tax expense for the years ended December 31, 2024 and 2023, respectively.

The Company accounts for income taxes in accordance with ASC

740, which requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset

to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits

is dependent on the Company's ability to generate sufficient taxable income within the carryforward period.

4 unchanged sentences

by approximately $ 3.6 million and $ 4.4 million during the years ended December 31, 2024 and 2023, respectively.

The Company’s deferred

tax assets are as follows (in thousands):

Schedule of deferred

The Company’s deferred tax

assets are as follows (in thousands):

Schedule of deferred tax assets

Year Ended December 31,

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Net deferred tax asset

Net operating losses and tax

credit carryforwards as of December 31, 2023, are as follows (in thousands):

Net operating losses and tax credit

carryforwards as of December 31, 2024, are as follows (in thousands):

Schedule of net operating losses and tax credit carryforwards

8 unchanged sentences

Tax credits, state

The effective tax rate of

the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:

The effective tax rate of the

Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:

Schedule of effective tax rate

4 unchanged sentences

Change in tax credits

Foreign withholding tax

Section 382 limitation

Section 162(m) limitation

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three-year period.

The Company is in the process of rolling forward its Section 382 study

through the period ending December 31, 2024.

The Company does not expect an ownership change to have occurred during this period as there

have been limited amounts of equity activity.

The Company establishes reserves

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accrued interest or penalties related to uncertain tax positions.

The Company files income tax

returns in the U.S.

The Company files income tax returns

federal jurisdiction and various state jurisdictions.

In the normal course of business, the Company is subject to

examination by their respective taxing authorities.

The Company is not currently under audit by the Internal Revenue Service or other

similar state or local authority.

In the normal course of business, the Company is subject to examination

by their respective taxing authorities.

The Company is not currently under audit by the Internal Revenue Service or other similar state

or local authority.

The statute of limitations remains effectively open for all tax years since inception (2007).

outside the normal statute of limitations remain open to examination by tax authorities due to tax attributes generated in earlier years

which have been carried forward and may be examined and adjusted in subsequent years when utilized.

Tax years outside the

normal statute of limitations remain open to examination by tax authorities due to tax attributes generated in earlier years which have

been carried forward and may be examined and adjusted in subsequent years when utilized.

The following table summarizes

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The following table summarizes

the activity in the Company’s Valuation Allowance and Qualifying Accounts (in thousands):

the activity in the Company’s Valuation Allowance and Qualifying Accounts for the years ended December 31, 2024 and 2023 (in thousands):

Schedule of valuation allowance

Deferred tax assets valuation allowance

Year ended December 31, 2023

Year ended December 31, 2022

Balance at beginning of year

Balance at end of year

SUBSEQUENT EVENTS

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events and transactions through the date these financial statements were issued.

Since December 31, 2023, the

Company has issued approximately 500,000 additional shares through its ATM offering at an average price per share of $8.08 resulting in

additional net proceeds, after deduction of commissions and expenses of approximately $3.9 million.

Since December 31, 2024, the Company

has issued approximately 163,000 additional shares through its ATM offering at an average price per share of $15.19 resulting in additional

net proceeds of approximately $2.4 million, after deduction of commissions and expenses.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data