Good afternoon and welcome to the Atomera Second Quarter 2019 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] This event is being recorded and will be available for replay for approximately one week. I would now like to turn the conference over to Mike Bishop. Please go ahead.

Thank you. Good afternoon. I’m Mike Bishop with the Company's Investor Relations. Joining me on today's call is Scott Bibaud, Atomera's President and CEO; and Frank Laurencio, Atomera's CFO. If you are joining by telephone, please go to the Events section of our Investor Relations page on our website to follow a slide presentation that accompanies our remarks. That presentation will remain available on our website after the call. After prepared comments by Scott and Frank, we will open up the call for your questions. Before we begin, I would like to remind everyone that during today's call, we will make forward-looking statements. These forward-looking 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 in the Company's prospective supplement filed with the SEC on May 30, 2019. 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. 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 posted to our website. Now, I would like to turn the call over to our President and CEO, Scott Bibaud. Please go ahead, Scott.

Thanks, Mike. Good afternoon, everyone, and welcome to this review of our second quarter results. It's been a very busy quarter and we have a lot to talk about. After my remarks, I will turn the call over to Frank, so he can go over our financial results and we will open it up to questions. Atomera is a materials and intellectual property licensing company with a proprietary transistor enhancement film called Mears Silicon Technology or MST. Our Company develops new materials designed to improve the performance of semiconductors and helps our customers integrate them into the manufacturing flow of both existing and new fabs. Our technology can address the slowdown in Moore's Law by providing new materials and integration techniques to the industry, which will improve performance, cut power consumption and decrease product costs. Atomera is not a manufacturer, we are an IP provider, granting customers the right to manufacture using our technology in exchange for a license fee and royalty payments upon shipment of the products. Last quarter, I was able to share with you three technical breakthroughs achieved through work with our customers and our internal R&D efforts. These past few months have been a demanding period with many trips to share our results with both new and existing customers and with further efforts to react to their feedback. The customer interest has been gratifying and the resulting development work looks very promising. I will share with you some of the more compelling technical results later, but first, let me cover our customer activity. In Q2, after publicly announcing our breakthrough results, we were able to meet with most of our existing customers and to discuss the data and to plan for future work together. In addition, we were able to meet with several new customers who…

Thank you, Scott. At the close of the market today, we issued a press release announcing our operating and financial results for the second quarter 2019. Our summary financial results are shown here, and I will now review them in more detail. Our GAAP net loss for the three months ended June 30, 2019 was $3.6 million compared to a net loss of $3.2 million in the second quarter of 2018. Our higher net loss was primarily due to increased operating expenses, which were $3.7 million in the first quarter of this year as compared to $3.2 million in the second quarter of 2018, offset in part by an increase in gross margin. GAAP net loss on a per share basis declined to $0.24 per share in the second quarter of 2019 from $0.26 per share in Q2 2018, primarily due to an increase in weighted average shares outstanding to 15.4 million in Q2 2019 as compared to 12.1 million shares in the same quarter a year earlier. This more than offset the higher net loss. The increased share count was mainly due to our equity financings in October 2018 and in May of this year. Our outstanding share count as of June 30, 2019 was approximately 17.1 million shares. Non-GAAP adjusted EBITDA in the second quarter was a loss of $2.9 million compared to a loss of $2.6 million in Q2 2018, reflecting the same factors that affected our GAAP results, and I will go into more details on those factors shortly. Our press release and this slide contain a reconciliation between our GAAP and non-GAAP results. As you can see, the major difference between our GAAP and non-GAAP results is stock-based compensation expense, which is a non-cash item. Our stock compensation expense in Q2 was $788,000 as compared…

Thanks, Frank. In Q2, Atomera has been able to successfully build on the momentum we generated with our breakthrough results. Our customer acquisition is going extremely well, and we hope to report a record quarter, both in terms of revenue and customer participation in Q3. Customers are actively assisting us with feedback that is driving our R&D pipeline with ideas that will make us more successful more quickly. Atomera is delivering compelling solutions to some of the most difficult problems in the semiconductor industry, and unlike other exotic options, the technology is available now. It is very clear that the Atomera of today is far more valuable than at any point in the life of the Company. We look forward to sharing more of our successes with you as we continue to build Atomera into an important and successful technology provider to the semiconductor industry. Operator, we will now take questions.

The conference has now concluded. I will now turn the call over to Mr. Bibaud for closing remarks.

Well, thank you all for attending today's presentation. Atomera had a very successful quarter, and we believe we will continue to carry this momentum into Q3. Please continue to look for our news, articles and blog posts to keep you up-to-date on the Company's progress. You can sign up for them along with investor alerts on our website, atomera.com. Should you have additional questions, please call Mike Bishop, and we'll be happy to follow up. We look forward to seeing you during some of our scheduled marketing activities, which we'll be announcing soon. We thank you again for your support and look forward to our next update call in November. Thank you.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program, and we may all disconnect. Everybody, have a wonderful day.