Atomera Inc Stock Compensation Disclosure
| 12. | STOCK-BASED COMPENSATION |
The Company’s 2007 Equity Incentive Plan (the “2007 Plan) expired in March 2017, however all options and warrants outstanding at the time of the expiration remained outstanding and exercisable by their term. As of December 31, 2025, options to purchase approximately shares of common stock remain outstanding under the 2007 Plan.
In May 2017, the Company’s shareholders approved its 2017 Stock Incentive Plan (the “2017 Plan”). 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 share grants. The Company reserved a total of shares of common stock for issuance under the 2017 Plan. All employees, officers, directors, consultants, advisors and other persons who provide services to the Company or any subsidiaries of the Company are eligible to receive incentive awards under the 2017 Plan. As of December 31, 2025, awards of approximately million shares of common stock had been granted under the 2017 Plan, net of forfeited restricted stock and option awards and approximately 15,000 shares of common stock are reserved for issuance.
In May 2023, the Company’s shareholders approved its 2023 Stock Incentive Plan (the “2023 Plan”). 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 share grants. The Company originally reserved a total of shares of common stock for issuance under the 2023 Plan. In May 2025, Company’s shareholders approved an amendment to the 2023 Plan, adding an additional shares to this plan. All employees, officers, directors, consultants, advisors and other persons who provide services to the Company or any subsidiaries of the Company are eligible to receive incentive awards under the 2023 Plan. As of December 31, 2025, awards of approximately million shares of common stock had been granted under the 2023 Plan, net of forfeited restricted stock and option awards and approximately 2.2 million shares of common stock are reserved for issuance.
The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the years ended December 31, 2025 and 2024 for stock options and restricted stock (in thousands):
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Research and development | $ | 2,053 | $ | 1,566 | ||||
| General and administrative | 2,930 | 2,120 | ||||||
| Selling and Marketing | (20 | ) | 181 | |||||
| Total | $ | 4,963 | $ | 3,867 | ||||
As of December 31, 2025, there was approximately $ million of total unrecognized compensation expense related to non-vested share-based compensation arrangements that are expected to vest. This cost is expected to be recognized over a weighted-average period of years.
Stock Options:
The Company records compensation expense for employee stock options over the vesting term using the straight-line method. The fair value of employee stock options issued was estimated using the following weighted-average assumptions:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Exercise price: | $ | 3.25 | $ | 5.39 | ||||
| Grant date fair value per share: | $ | $ | ||||||
| Assumptions: | ||||||||
| Expected volatility | % | % | ||||||
| Weighted average expected term (in years) | ||||||||
| Risk-free interest rate | ||||||||
| Expected dividend yield | % | % | ||||||
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 estimated using historical data of the Company’s option 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 fair value of options issued during the year ended December 31, 2025 was approximately $517,000. The following table summarizes stock option activity during the year ended December 31, 2025 (in thousands except exercise prices and contractual terms):
Number of Shares | Weighted- Average Exercise Prices per Share | Weighted- Remaining Contractual Term (In Years) | Intrinsic Value | |||||||||||||
| Outstanding at January 1, 2025 | 3,793 | $ | 6.64 | |||||||||||||
| Granted | 195 | $ | 3.25 | |||||||||||||
| Exercised | (173 | ) | $ | 5.23 | ||||||||||||
| Forfeited | (167 | ) | $ | 3.50 | ||||||||||||
| Expired | (741 | ) | $ | 7.23 | ||||||||||||
| Outstanding at December 31, 2025 | 2,907 | $ | 6.53 | $ | – | |||||||||||
| Exercisable at December 31, 2025 | 2,383 | $ | 6.78 | $ | – | |||||||||||
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. Time based awards are expenses using the straight-line method. . The following table summarizes all restricted stock award activity during the year ended December 31, 2025 (in thousands except per share data):
Number of Shares | Weighted-Average Grant Date Fair Value per Share | |||||||
| Outstanding at January 1, 2025 | 469 | $ | 7.17 | |||||
| Vested | (231 | ) | $ | 7.41 | ||||
| Forfeited | (4 | ) | $ | 8.77 | ||||
| Outstanding non-vested shares at December 31, 2025 | 234 | $ | 6.90 | |||||
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 compensation expenses are recorded on a straight-line method. 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 RSUs are 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 compensation expense is recognized using the accelerated expense attribution method for each award, which generally equals the vesting term for each performance period.
The following table summarizes all restricted stock unit activity during the year ended December 31, 2025 (in thousands except per share prices data):
| Time-Based Units | Performance- Based Units | Total Restricted Stock Units | Weighted-Average Grant Date Fair Value per Share | |||||||||||||
| Outstanding at January 1, 2025 | – | – | – | $ | – | |||||||||||
| Granted | 503 | 251 | 754 | $ | 7.52 | |||||||||||
| Vested | (82 | ) | – | (82 | ) | $ | 6.34 | |||||||||
| Forfeited | (34 | ) | (30 | ) | (64 | ) | $ | 8.08 | ||||||||
| Outstanding at December 31, 2025 | 387 | 221 | 608 | $ | 7.62 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2022 | Feb 15, 2023 | |
| 2017 | Mar 6, 2018 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.