10-Q: Forge Nano Completes Business Combination, Secures PIPE Financing

Forge Nano Holdings, Inc. (formerly ATII) reports on its Q3 2026 performance, detailing the significant business combination with Forge Nano, Inc. and a substantial PIPE financing, while also presenting the standalone financial results of Forge Nano, Inc. prior to the merger.

Summary

• Forge Nano Holdings, Inc. (formerly ATII) filed its Form 10-Q for the quarterly period ended September 30, 2026.
• The filing details the business combination between ATII and Forge Nano, Inc., which closed on October 22, 2026, resulting in the renaming of ATII to Forge Nano Holdings, Inc.
• A PIPE financing of $100 million from an initial investor and $23 million from additional investors was also completed concurrently with the closing.
• The company reported a net loss of $100,559,904 for the nine months ended September 30, 2026, and had no cash and a working capital deficit of $100,560,563 as of September 30, 2026.
• However, subsequent to the balance sheet date, the business combination and financing provided sufficient liquidity, alleviating substantial doubt regarding the company's ability to continue as a going concern.
• Forge Nano, Inc. (prior to the business combination) reported net losses of $11,954 thousand for the three months and $44,504 thousand for the nine months ended September 30, 2026.
• Forge Nano, Inc. also reported net sales of $1,966 thousand for the three months and $6,067 thousand for the nine months ended September 30, 2026.
• The company acquired HzO, Inc. on November 4, 2026, in an all-stock transaction.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as cautiously optimistic, primarily due to the successful business combination and PIPE financing, which alleviates going concern issues. However, the significant operating losses and the company's early stage status temper the overall sentiment.

Positives

• Successful completion of the business combination with Forge Nano, Inc. on October 22, 2026.
• Secured $123 million in PIPE financing ($100 million from initial investor, $23 million from additional investors) concurrently with the business combination.
• Alleviation of substantial doubt regarding the company's ability to continue as a going concern due to post-combination liquidity.
• Forge Nano, Inc. (pre-combination) saw an 11% increase in revenue from tool manufacturing and related services for the three months ended September 30, 2026, driven by commercial Tephra projects.
• Forge Nano, Inc. (pre-combination) experienced a 35% increase in revenue from tool manufacturing and related services for the nine months ended September 30, 2026, primarily due to new commercial-scale Tephra projects.
• Acquisition of HzO, Inc. on November 4, 2026, expanding the company's portfolio.

Negatives

• Forge Nano Holdings, Inc. (pre-combination) reported a net loss of $100,559,904 for the nine months ended September 30, 2026.
• As of September 30, 2026, Forge Nano Holdings, Inc. had no cash and a working capital deficit of $100,560,563.
• Forge Nano, Inc. (pre-combination) incurred net losses of $11,954 thousand for the three months and $44,504 thousand for the nine months ended September 30, 2026.
• Forge Nano, Inc. (pre-combination) reported a gross loss of $1,938 thousand for the three months and $5,036 thousand for the nine months ended September 30, 2026.
• Battery manufacturing revenue for Forge Nano, Inc. (pre-combination) decreased by 26% for the three months and 21% for the nine months ended September 30, 2026.
• Significant increase in cost of sales for Forge Nano, Inc. (pre-combination), up 26% for the three months and 47% for the nine months ended September 30, 2026, outpacing revenue growth.

Risks

• Risks related to the company's ability to realize the anticipated benefits of the acquisition of HzO, Inc.
• Risks related to changes in applicable laws or regulations.
• Risks related to the company's ability to successfully develop and deploy new technologies.
• Risks related to the effects of competition on the company's business, financial condition, and results of operations.
• Risks related to the availability and cost of raw materials.
• Risks related to the company's ability to meet customer specifications and provide adequate support.
• Risks related to delays in the construction and operation of production facilities.
• Risks related to intellectual property infringement, data protection, and other losses.

Future Outlook

Following the business combination and PIPE financing, management believes the company has sufficient liquidity to meet its obligations and fund planned operations for at least twelve months. The company anticipates growth driven by its technology in semiconductor tools and battery manufacturing, with specific milestones for earn-out shares tied to stock performance and revenue targets.

Management Comments

• Management concluded that recurring losses from operations, negative operating cash flows and limited liquidity raised substantial doubt regarding the Company's ability to continue as a going concern prior to the business combination.
• Management updated its cash flow forecasts to reflect the capital raised and expected operating expenditures of the combined company, concluding that sufficient liquidity exists.
• Management believes that presenting grant income on a gross basis provides greater transparency into both the level of grant funding received and the underlying operating costs associated with these programs.

Industry Context

StockSavvy.ai notes that the successful business combination and PIPE financing for Forge Nano Holdings, Inc. (formerly ATII) is occurring within a dynamic technology sector. The company's focus on Atomic Layer Deposition (ALD) for semiconductor tools and battery components positions it in high-growth, albeit competitive, markets. The recent acquisition of HzO, Inc. further signals a strategy of consolidation and expansion within the advanced materials and nanocoatings space.

Comparison to Industry Standards

• Forge Nano's ALDx technology for semiconductor tools is claimed to run approximately 10 times faster than competitors' ALD tools while consuming a fraction of precursor materials.
• The company's Atomic Armor technology for battery components aims to increase battery capacity and energy density by up to 20% while extending cycle life, compared to standard ALD-coated components.
• The company's focus on a U.S.-sourced and manufactured battery supply chain for gigawatt-scale production aims to differentiate it from global competitors, particularly those based in China.

Legal Proceedings

• Management believes that the probability of a material loss from any of the Company's existing claims is remote, and there are no legal proceedings that the Company believes will have a material adverse effect on its financial position.

Related Party Transactions

• Amounts due to Parent (ATII) represent general and administrative expenses paid on behalf of the Company by Parent and are due on demand. As of September 30, 2026, amounts due to Parent amounted to $140,338.

Stakeholder Impact

• Shareholders: The business combination and PIPE financing are expected to provide capital for future growth, potentially increasing shareholder value, but also dilute existing shareholders. Earn-out shares introduce potential future dilution tied to performance.
• Creditors: The company's improved liquidity post-financing should strengthen its ability to meet obligations.
• Employees: The acquisition of HzO, Inc. means HzO employees will join Forge Nano Holdings, Inc., indicating potential integration and new opportunities.
• Suppliers: Increased production and operations may lead to greater demand for raw materials and components.

Next Steps

• Integrate HzO, Inc. operations following its acquisition on November 4, 2026.
• Continue to develop and deploy new technologies to address customer needs.
• Manage and grow operations profitably post-acquisition.
• Monitor and adapt to changes in applicable laws and regulations.
• Focus on meeting customer specifications and providing effective support.
• Continue to manage intellectual property, data protection, and other risks.
• Implement controls and procedures required for public companies.
• Pursue achievement of earn-out share milestones tied to VWAP and revenue targets.

Key Dates

Recommendation

The company has successfully completed a critical business combination and secured significant financing, which addresses immediate going concern issues and provides capital for growth. However, the company is still in an early stage, reporting substantial operating losses and negative cash flows prior to the combination. The integration of HzO and the execution of its growth strategy in competitive markets like battery technology and semiconductor tools will be key. The significant number of outstanding warrants and earn-out shares also present potential future dilution. Therefore, a 'hold' recommendation is appropriate pending further evidence of operational execution and profitability.

Keywords

Business Combination, PIPE Financing, SPAC, Atomic Layer Deposition, Nanocoatings, Battery Technology, Semiconductor Tools, HzO Acquisition