Atomera Inc Leases Disclosure

  

8.

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.

 

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. 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 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,
		2024				2023
Financing lease costs:
Amortization of ROU assets		$	1,074			$	1,146
Interest on lease liabilities			129				194
Total financing lease costs		$	1,203			$	1,340
Operating lease costs
Fixed lease costs		$	262			$	257
Variable lease costs			3				2
Short-term lease costs			1,044				1,045
Total operating lease costs		$	1,309			$	1,304

 

Future minimum payments under non-cancellable leases as of December 31, 2024 were as follows (in thousands):

Schedule of future minimum payments
For the Year Ended December 31,		Financing leases				Operating leases
2025		$	1,291			$	268
2026			478				24
Total future minimum lease payments			1,769				292
Less imputed interest			(67	)			(10	)
Total lease liability		$	1,702			$	282

  

The below table 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
		Year Ended December 31,
		2024				2023
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities		$	302			$	272
Cash paid for amounts included in the measurement of financing lease liabilities		$	1,263			$	1,112
Non-cash activity:
Right-of-use assets obtained in exchange for operating lease obligations		$	–			$	33
Remeasurement of right-of use asset and liability in financing lease obligations		$	(241	)		$	(115	)

 

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 5.49% for the Company’s operating leases. The weighted average remaining lease term is 1.6 years for the financing lease and 1.1 years for operating leases.