Atomera Inc 10-Q

Item 1. Financial Statements Atomera Incorporated Condensed Balance Sheets (in thousands, except per share data) March 31, December 31, 2025 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 24,123 $ 25,778 Short-term investments – 995 Accounts receivable – 6 Interest receivable 81 73 Prepaid expenses and other current assets 335 240 Total current assets 24,539 27,092 Property and equipment, net 52 59 Long-term prepaid maintenance and supplies 91 91 Security deposit 14 14 Operating lease right-of-use asset 218 280 Financing lease right-of-use-asset 1,338 1,588 Total assets $ 26,252 $ 29,124 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 761 $ 492 Accrued expenses 195 239 Accrued payroll-related expenses 402 1,328 Current operating lease liability 184 260 Current financing lease liability 1,314 1,253 Deferred revenue – 4 Total current liabilities 2,856 3,576 Long-term operating lease liability – 22 Long-term financing lease liability 113 449 Total liabilities 2,969 4,047 Commitments and contingencies (see Note 9) – – Stockholders’ equity: Preferred stock $ 0.001 par value, authorized 2,500 shares; none issued and outstanding as of March 31, 2025 and December 31, 2024 – – Common stock: $ 0.001 par value, authorized 47,500 shares; 30,704 shares issued and outstanding as of March 31, 2025; and 30,540 shares issued and outstanding as of December 31, 2024 31 31 Additional paid in capital 249,981 246,565 Other comprehensive income – 1 Accumulated deficit ( 226,729 ) ( 221,520 ) Total stockholders’ equity 23,283 25,077 Total liabilities and stockholders’ equity $ 26,252 $ 29,124 The accompanying notes are an integral part of these condensed financial statements. 3 Atomera Incorporated Condensed Statements of Operations (Unaudited) (in thousands, except per share data) Three Months Ended March 31, 2025 2024 Revenue $ 4 18 Cost of revenue – ( 33 ) Gross margin 4 ( 15 ) Operating expenses Research and development 3,255 2,858 General and administrative 2,088 1,811 Selling and marketing 124 350 Total operating expenses 5,467 5,019 Loss from operations ( 5,463 ) ( 5,034 ) Other income (expense) Interest income 270 205 Accretion income 6 46 Interest expense ( 21 ) ( 39 ) Other expense, net ( 1 ) – Total other income, net 254 212 Net loss $ ( 5,209 ) ( 4,822 ) Net loss per common share, basic $ ( 0.17 ) ( 0.19 ) Net loss per common share, diluted $ ( 0.17 ) ( 0.19 ) Weighted average number of common shares outstanding, basic 30,243 26,038 Weighted average number of common shares outstanding, diluted 30,243 26,038 The accompanying notes are an integral part of these condensed financial statements. 4 Atomera Incorporated Condensed Statements of Comprehensive Loss (Unaudited) (in thousands, except per share data) Three Months Ended March 31, 2025 2024 Net loss $ ( 5,209 ) ( 4,822 ) Unrealized loss on available-for-sale securities ( 1 ) ( 1 ) Net loss $ ( 5,210 ) ( 4,823 ) The accompanying notes are an integral part of these condensed financial statements. 5 Atomera Incorporated Statements of Stockholders’ Equity For the Three Months Ended March 31, 2025 and 2024 (Unaudited) (in thousands) Common Stock Additional Paid-in Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Loss Deficit Equity Balance January 1, 2025 30,540 $ 31 $ 246,565 $ 1 $ ( 221,520 ) $ 25,077 Stock-based compensation – – 1,009 – – 1,009 At-the-market sale of stock, net of commissions and expenses 164 – 2,407 – – 2,407 Net loss – – – – ( 5,209 ) ( 5,209 ) Unrealized gain (loss) on available-for-sale securities – – – ( 1 ) – ( 1 ) Balance March 31, 2025 30,704 $ 31 $ 249,981 $ – $ ( 226,729 ) $ 23,283 Common Stock Additional Paid-in Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Loss Deficit Equity Balance January 1, 2024 26,107 $ 26 $ 221,229 $ – $ ( 203,085 ) $ 18,170 Stock-based compensation 275 – 1,024 – – 1,024 Stock option exercise 13 – 86 – – 86 Forfeiture of restricted stock issuance ( 20 ) – – – – – At-the-market sale of stock, net of commissions and expenses 510 1 3,949 – – 3,950 Net loss – – – – ( 4,822 ) ( 4,822 ) Unrealized gain (loss) on available-for-sale securities – – – ( 1 ) – ( 1 ) Balance March 31, 2024 26,885 $ 27 $ 226,288 $ ( 1 ) $ ( 207,907 ) $ 18,407 The accompanying notes are an integral part of these condensed financial statements. 6 Atomera Incorporated Condensed Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ ( 5,209 ) $ ( 4,822 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 12 17 Operating lease right of use asset amortization 61 58 Financing lease right of use asset amortization 251 281 Stock-based compensation 1,009 1,024 Net accretion of discounts on available-for-sale securities ( 6 ) ( 46 ) Changes in operating assets and liabilities: Accounts receivable 6 – Unbilled contracts receivable – 550 Interest receivable ( 8 ) 12 Prepaid and other current assets ( 95 ) ( 84 ) Accounts payable 269 ( 114 ) Accrued expenses ( 44 ) ( 12 ) Accrued payroll expenses ( 926 ) ( 928 ) Operating lease liability ( 98 ) ( 102 ) Deferred revenue ( 4 ) 17 Net cash used in operating activities ( 4,782 ) ( 4,149 ) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment ( 4 ) – Purchase of available-for-sale securities – ( 1,479 ) Maturity of available-for-sale securities 1,000 4,000 Net cash provided by investing activities 996 2,521 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from at-the-market sale of stock, net of commissions and expenses 2,407 3,950 Proceeds from exercise of stock options – 86 Payments on principal of financing lease ( 276 ) ( 193 ) Net cash provided by financing activities 2,131 3,843 Net increase/(decrease) in cash and cash equivalents ( 1,655 ) 2,215 Cash and cash equivalents at beginning of period 25,778 12,591 Cash and cash equivalents at end of period $ 24,123 $ 14,806 Supplemental information: Cash paid for interest $ 21 $ 26 Cash paid for taxes $ – $ – The accompanying notes are an integral part of these condensed financial statements. 7 ATOMERA INCORPORATED NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS For the Three Months Ended March 31, 2025 and 2024 1. NATURE OF OPERATIONS Atomera Incorporated (“Atomera” or the “Company”) was incorporated in the state of Delaware in March 2007 under the name MEARS Technologies, Inc. and is engaged in the development, commercialization and licensing of proprietary processes and technologies for the semiconductor industry. On January 12, 2016, the Company changed its name to Atomera Incorporated. Atomera is an early-stage company, having only 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. 2. LIQUIDITY AND MANAGEMENT PLANS At March 31, 2025, the Company had cash and cash equivalents of approximately $ 24.1 million and working capital of approximately $ 21.7 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. Inc. and Craig-Hallum Capital Group LLC (“Craig-Hallum”), 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 agents, having aggregate offering proceeds of up to $50.0 million (the “ATM”). During the three months ended March 31, 2025, the Company sold approximately 164,000 shares pursuant to the ATM at an average price per share of approximately $ 15.19 , resulting in approximately $ 2.4 million of net proceeds to the Company after deducting commissions and other offering expenses. The Company’s ATM expired on March 18, 2025. 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 or acquire technologies to enhance or complement its current offerings. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 4, 2025. Basis of Presentation of Unaudited Condensed Financial Information The unaudited condensed financial statements of the Company for the three months ended March 31, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and its results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2024 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 4, 2025. These unaudited condensed financial statements should be read in conjunction with that report. 8 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 value. 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 end date. 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. Adoption of Recent Accounting Standards In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-08”). This new guidance requires entities on an annual basis disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The guidance applies to annual periods beginning after December 15, 2024 on a prospective basis, (early adoption is permitted). The Company adopted this standard on January 1, 2025 for the annual period ending December 31, 2025. While the standard requires additional disclosures, the adoption did not have a material impact on the Company’s financial position, results of operations or financial statement disclosures. Recent Accounting Standards In November 2024, the FASB issued ASU 2024-03 (as clarified by ASU 2025-01 in January 2025), 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 annual reporting periods beginning after December 15, 2026, and for interim periods within annual reporting 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. 4. FAIR VALUE MEASUREMENTS Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”) states that fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, consists of: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 — Inputs other than Level 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. 9 The Company’s cash equivalents and short-term investments were measured at fair value on a recurring basis as Level 1 assets. The Company’s cash, cash equivalents and short-term investments classified by security type as of March 31, 2025 and December 31, 2024 consisted of the following (in thousands): Schedule of fair value measurements March 31, 2025 Cost Unrealized Gain/(Loss) Accretion of Discount Fair Value Cash $ 1 $ – $ – $ 1 Money market funds 24,122 – – 24,122 Total $ 24,123 $ – $ – $ 24,123 December 31, 2024 Cost Unrealized Gain/(Loss) Accretion of Discount Fair Value Cash $ 1 $ – $ – $ 1 Money market funds 25,777 – – 25,777 US agency bonds 976 1 18 995 Total $ 26,754 $ 1 $ 18 $ 26,773 5. REVENUE The Company recognizes revenue in accordance with ASC 606. The amount of revenue that the Company recognizes reflects the consideration it expects to receive in exchange for goods or services and such revenue is recognized at the time when goods or services are transferred and/or delivered to its customers. Revenue is recognized when the Company satisfies a performance obligation by transferring the product or service to the customer, either at a point in time or over time. The Company usually recognizes revenue from integration service agreements and from manufacturing licenses at a point in time unless the agreements provide for customer acceptance in which case revenue is recognized over time. Revenue from MSTcad licenses is recognized over a period of time. The following table provides information about disaggregated revenue by primary geographical markets and timing of revenue recognition (in thousands): Schedule of disaggregated revenue by primary geographical markets and timing of revenue recognition Three Months Ended March 31, 2025 2024 Primary geographic markets North America $ 4 $ 18 Asia Pacific – – Total $ 4 $ 18 Timing of revenue recognition Products and services transferred at a point in time $ – $ 18 Products and services transferred over time 4 – Total $ 4 $ 18 10 Unbilled contracts receivable Timing of revenue recognition may differ from the timing of invoicing customers. Accounts receivable includes amounts billed and currently due from customers. Unbilled contracts receivable represents unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and the right to receive payment is subject to the underlying contractual terms. Unbilled contracts receivable amounts may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Deferred Revenue 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 March 31, 2025, the Company did no t have any deferred revenue to recognize in the future. 6. 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 (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. The following potential common stock equivalents were not included in the calculation of diluted net loss per common share because the inclusion thereof would be anti-dilutive (in thousands): Schedule of anti-dilutive shares Three Months Ended March 31, 2025 2024 Stock Options 3,582 3,670 Unvested restricted stock awards 423 620 Unvested restricted stock units 583 – Total 4,588 4,290 7. LEASES 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. 11 In December 2024, the Company entered into a lease agreement for a tool in Tempe, Arizona. 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 condensed 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 Three Months Ended March 31, 2025 2024 Financing lease costs: Amortization of ROU assets $ 251 $ 281 Interest on lease liabilities 21 39 Total financing lease costs $ 272 $ 320 Operating lease costs Fixed lease costs $ 65 $ 66 Variable lease costs 1 – Short-term lease costs 285 261 Total operating lease costs $ 351 $ 327 Future minimum payments under non-cancellable leases as of March 31, 2025 were as follows (in thousands): Schedule of future minimum payments For the Year Ended December 31, Financing leases Operating leases Remaining 2025 $ 994 $ 166 2026 479 23 Total future minimum lease payments 1,473 189 Less imputed interest ( 46 ) ( 5 ) Total lease liability $ 1,427 $ 184 The table below provides supplemental information and non-cash activity related to the Company’s operating and financing leases (in thousands): Schedule of supplemental information and non-cash activity Three Months Ended March 31, 2025 2024 Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 102 $ 110 Cash paid for amounts included in the measurement of financing lease liabilities $ 297 $ 219 The table above does not include short-term leases that are one-year or less. The weighted average remaining discount rate is 5.25 % for the Company’s financing leases and 5.54 % for the Company’s operating leases. The weighted average remaining lease term is 1.3 years for the financing lease and 0.9 years for operating leases. 12 8. STOCK BASED COMPENSATION In May 2017, the Company’s shareholders approved its 2017 Stock Incentive Plan (“2017 Plan”) after its 2007 Stock Incentive Plan (“2007 Plan”) had expired in March 2017. The 2017 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock and for the grant of restricted and unrestricted shares and units. The 2017 Plan provides for the issuance of 3,750,000 shares of common stock. In May 2023, the Company’s shareholders approved its 2023 Stock Incentive Plan (“2023 Plan”). The 2023 plan provides for the issuance of 2,000,000 shares of common stock. All employees and employees of any subsidiary (including officers and directors who are also employees), as well as all of the nonemployee directors and other consultants, advisors and other persons who provide services to the Company are eligible to receive incentive awards under the 2017 Plan and 2023 Plan. Generally, stock options, restricted stock and restricted stock units issued under the 2017 Plan and 2023 Plan vest over a period of one to three to four years from the date of grant. As of March 31, 2025, approximately 743,000 shares remain available for issuance under both available plans. The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations for stock options, restricted stock and restricted stock units granted under the Company’s incentive plans (in thousands): Schedule of stock-based compensation expense Three Months Ended March 31, 2025 2024 Research and development $ 459 $ 377 General and administrative 599 583 Selling and marketing ( 49 ) 64 Total $ 1,009 $ 1,024 As of March 31,2025, there was approximately $ 9.4 million of total unrecognized compensation expense related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 2.5 years. Stock Options: The weighted average grant date fair value per share of the options granted under the Company’s Plans was $ 4.98 for the three months ended March 31, 2024. There were no stock options issued in the three months ended March 31, 2025. The following table summarizes stock option activity during the three months ended March 31, 2025 (in thousands except exercise prices and contractual terms): Schedule of stock option activity Number of Shares Weighted- Average Exercise Prices per Share Weighted- Average Remaining Contractual Term (In Years) Intrinsic Value Outstanding at January 1, 2025 3,793 $ 6.64 Forfeited ( 167 ) $ 3.50 Expired ( 44 ) $ 6.60 Outstanding at March 31, 2025 3,582 $ 6.79 3.90 $ 72 Exercisable at March 31, 2025 3,074 $ 6.74 3.16 $ 44 13 Restricted Stock Awards: The Company has issued restricted stock awards to employees, directors and consultants and estimates the fair value based on the closing price on the day of grant. There were no restricted stock awards issued in the three months ended March 31, 2025. The following table summarizes all restricted stock award activity during the three months ended March 31, 2025 (in thousands except per share data): Schedule of restricted stock activity Number of Shares Weighted-Average Grant Date Fair Value per Share Outstanding at January 1, 2025 469 $ 7.17 Vested ( 46 ) $ 9.71 Outstanding non-vested shares at March 31, 2025 423 $ 6.89 Restricted Stock Units: Beginning in January 2025, the Company began issuing restricted stock units (“RSUs”) to employees, directors and consultants and a portion of the RSUs issued are subject to time-based vesting and a portion are subject to performance-based vesting criteria. The fair value of time-based RSUs is based on the closing price on the day of grant and they vest over three to four years. Awards of performance-based restricted stock units by the Company have a performance period of one, two and three years with the vesting of each award tranche dependent on the Company’s Total Shareholder Return (“TSR”) relative to the TSR of companies in the Russell 2000 Index over that tranche’s performance period. The fair value for performance-based awards is fixed at the grant date using a Monte Carlo simulation and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of TSR achievement. The weighted average grant date fair value per share of the RSUs granted was $ 7.81 . The following table summarizes all restricted stock unit activity during the three months ended March 31, 2025 (in thousands except per share prices data): Schedule of restricted stock unit activity Time-Based Units Performance- Based Units Total Restricted Stock Units Weighted-Average Grant Date Fair Value per Share Outstanding at January 1, 2025 – – – $ – Granted 392 251 643 $ 7.81 Forfeited ( 30 ) ( 30 ) ( 60 ) $ 8.21 Outstanding at March 31, 2025 362 221 583 $ 7.77 9. COMMITMENTS AND CONTINGENCIES Litigation, Claims and Assessments The Company may be subject to periodic lawsuits, investigations and claims that arise in the ordinary course of business. The Company is not party to any material litigation as of March 31, 2025, or through the date these financial statements have been issued. 14 10. EQUITY 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 . 11. SEGMENT INFORMATION 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 is reported on the accompanying condensed balance sheets as total assets. The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2025 and 2024: Schedule of selected financial information Three Month Ended March 31, 2025 2024 Revenue: $ 4 $ 18 Less expenses (1) : Employee related expenses 1,787 1,823 Stock-based compensation 1,009 1,024 Tool related expenses 611 626 Consulting expenses 150 166 Metrology and other outsourced research expenses 461 196 Intellectual property related expenses 351 194 Other operating items (2) 1,098 1,023 Operating margin ( 5,463 ) ( 5,034 ) Other income (expense), net 254 212 Net loss $ ( 5,209 ) $ ( 4,822 ) (1) Expenses classified as cost of revenue are included in the line items presented and not as a separate category. (2) 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. 12. SUBSEQUENT EVENTS Management has evaluated subsequent events and transactions through the date these financial statements were issued. 15