UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-32929

PERASO INC.

(Exact name of registrant as specified in its charter)

Delaware		77-0291941
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or organization)		Identification Number)

2033 Gateway Place, Suite 500

San Jose, California 95110

(Address of principal executive office and zip code)

(408) 418-7500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		PRSO		The Nasdaq Stock Market, LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s exchangeable shares, no par value, was 57,085 as of November 7, 2025.

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 8,924,662 as of November 7, 2025.

PERASO INC.

FORM 10-Q

For the Quarterly Period Ended September 30, 2025

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited):	1

	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	1

	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024	2

	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024	3

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 4.	Controls and Procedures	29

PART II — OTHER INFORMATION		30

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

	Signatures	35

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PERASO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

	September 30,			December 31,
	2025			2024
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1,865		$	3,344
Accounts receivable, net		1,783			682
Inventories, net		1,574			2,079
Prepaid expenses and other		350			188
Total current assets		5,572			6,293

Property and equipment, net		399			512
Right-of-use lease assets		161			267
Other		106			134
Total assets	$	6,238		$	7,206
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,465		$	1,036
Accrued expenses and other		901			1,987
Deferred revenue		14			341
Short-term lease liabilities		92			139
Total current liabilities		2,472			3,503

Long-term lease liabilities		100			182
Warrant liabilities		65			55
Total liabilities		2,637			3,740
Commitments and contingencies (Note 5)
Stockholders’ equity
Preferred stock, $0.01 par value; 20,000 shares authorized; none issued and outstanding		—			—
Series A, special voting preferred stock, $0.01 par value; one share authorized, issued and outstanding at September 30, 2025 and December 31, 2024		—			—
Common stock, $0.001 par value; 120,000 shares authorized; 7,580 and 4,474 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		5			3
Exchangeable shares, no par value; unlimited shares authorized; 57 and 60 shares outstanding at September 30, 2025 and December 31, 2024, respectively		—			—
Issuable shares, 837 and 917 shares at September 30, 2025 and December 31, 2024, respectively		988			1,193
Additional paid-in capital		183,238			179,390
Accumulated deficit		(180,630	)		(177,120	)
Total stockholders’ equity		3,601			3,466
Total liabilities and stockholders’ equity	$	6,238		$	7,206

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

`	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Net revenue
Product	$	3,062		$	3,811		$	9,080		$	10,596
Royalty and other		172			30			243			299
Total net revenue		3,234			3,841			9,323			10,895
Cost of net revenue		1,417			2,034			3,753			5,431
Gross profit		1,817			1,807			5,570			5,464
Operating expenses
Research and development		1,528			2,158			4,773			7,615
Selling, general and administrative		1,479			2,349			4,501			6,592
Severance and software license obligations		—			—			(223	)		2,063
Total operating expenses		3,007			4,507			9,051			16,270
Loss from operations		(1,190	)		(2,700	)		(3,481	)		(10,806	)
Change in fair value of warrant liabilities		(16	)		4			(10	)		1,649
Other expense, net		(4	)		(16	)		(19	)		(11	)
Net loss	$	(1,210	)	$	(2,712	)	$	(3,510	)	$	(9,168	)

Net loss per share
Basic and diluted	$	(0.17	)	$	(0.98	)	$	(0.55	)	$	(3.62	)

Shares used in computing net loss per share
Basic and diluted		7,257			2,780			6,332			2,530

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

	Common Stock				Issuable Shares						Exchangeable Shares					Additional Paid-In			Accumulated
	Shares		Amount		Shares			Amount			Shares			Amount		Capital			Deficit			Total
Balance as of December 31, 2024		4,474	$	3		917		$	1,193			60		$	—	$	179,390		$	(177,120	)	$	3,466
At-the market sales of stock, net		329		1		—			—			—			—		432			—			433
Shares issued for services		40		—		—			—			—			—		40			—			40
Stock-based compensation		—		—		—			—			—			—		125			—			125
Net loss		—		—		—			—			—			—		—			(471	)		(471	)
Balance as of March 31, 2025		4,843		4		917			1,193			60			—		179,987			(177,591	)		3,593
At-the market sales of stock, net		941		1		—			—			—			—		1,078			—			1,079
Issuance of abeyance shares		140		—		(140	)		(182	)		—			—		182			—			—
Exchange of exchangeable shares		3		—		—			—			(3	)		—		—			—			—
Issuance of common stock under stock plan, net		6		—		—			—			—			—		3			—			3
Stock-based compensation		—		—		—			—			—			—		141			—			141
Net loss		—		—		—			—			—			—		—			(1,829	)		(1,829	)
Balance as of June 30, 2025		5,933		5		777			1,011			57			—		181,391			(179,420	)		2,987
At-the market sales of stock, net		733		—		—			—			—			—		744			—			744
Issuance of abeyance shares		777		—		(777	)		(1,011	)		—			—		1,011			—			—
Issuance of common stock and warrants from warrant inducement offering, net		115		—		837			988			—			—		(55	)		—			933
Issuance of common stock under stock plan, net		22		—		—			—			—			—		16			—			16
Stock-based compensation		—		—		—			—			—			—		131			—			131
Net loss		—		—		—			—			—			—		—			(1,210	)		(1,210	)
Balance as of September 30, 2025		7,580	$	5		837		$	988			57		$	—	$	183,238		$	(180,630	)	$	3,601

	Common Stock				Issuable Shares				Exchangeable Shares					Additional Paid-In			Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount		Capital			Deficit			Total
Balance as of December 31, 2023		673	$	1		—	$	—		95		$	—	$	170,474		$	(166,392	)	$	4,083
Shares issued for reverse stock split		52		—		—		—		—			—		—			—			—
Sale of common stock and warrants, net		563		—		—		—		—			—		3,431			—			3,431
Issuance of common stock upon exercise of warrants		1,001		1		—		—		—			—		—			—			1
Stock-based compensation		—		—		—		—		—			—		1,222			—			1,222
Net loss		—		—		—		—		—			—		—			(2,031	)		(2,031	)
Balance as of March 31, 2024		2,289		2		—		—		95			—		175,127			(168,423	)		6,706
Issuance of common stock upon exercise of warrants		307		1		—		—		—			—		—			—			1
Sale of common stock		100		—		—		—		—			—		127			—			127
Exchange of exchangeable shares		8		—		—		—		(8	)		—		—			—			—
Issuance of common stock under stock plan, net		2		—		—		—		—			—		(4	)		—			(4	)
Stock-based compensation		—		—		—		—		—			—		1,155			—			1,155
Net loss		—		—		—		—		—			—		—			(4,425	)		(4,425	)
Balance as of June 30, 2024		2,706		3		—		—		87			—		176,405			(172,848	)		3,560
At-the market sales of stock, net		110		—		—		—		—			—		164			—			164
Shares issued for services		40		—		—		—		—			—		54			—			54
Stock-based compensation		—		—		—		—		—			—		960			—			960
Net loss		—		—		—		—		—			—		—			(2,712	)		(2,712	)
Balance as of September 30, 2024		2,856	$	3		—	$	—		87		$	—	$	177,583		$	(175,560	)	$	2,026

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended
	September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(3,510	)	$	(9,168	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		196			2,964
Stock-based compensation		397			3,337
Change in fair value of warrant liabilities		10			(1,649	)
Shares issued for services		40			54
Other		26			(8	)
Changes in assets and liabilities
Accounts receivable		(1,090	)		(60	)
Inventories		469			103
Prepaid expenses and other		(139	)		(15	)
Accounts payable		429			(743	)
Right-of-use assets		106			260
Lease liabilities - operating		(76	)		(205	)
Deferred revenue, accrued expenses and other		(1,413	)		1,238
Net cash used in operating activities		(4,555	)		(3,892	)
Cash flows from investing activities:
Purchases of property and equipment		(79	)		—
Net cash used in investing activities		(79	)		—
Cash flows from financing activities:
Proceeds from Warrant Inducement Offering		933			3,559
Proceeds from at-the-market sales of stock, net		2,256			164
Proceeds from option exercises		19			—
Taxes paid to net share settle equity awards		—			(3	)
Repayment of financing leases		(53	)		(94	)
Net cash provided by financing activities		3,155			3,626
Net decrease in cash and cash equivalents		(1,479	)		(266	)
Cash and cash equivalents at beginning of period		3,344			1,583
Cash and cash equivalents at end of period	$	1,865		$	1,317

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERASO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. The Company and Summary of Significant Accounting Policies

Peraso Inc., formerly known as MoSys, Inc. (the Company), was incorporated in California in 1991 and reincorporated in 2000 in Delaware. The Company is a fabless semiconductor company specializing in the development of millimeter wave (mmWave), which is generally described as the frequency band from 24 Gigahertz (GHz) to 300 GHz, wireless technology. The Company derives revenue from selling its semiconductor devices and modules and performance of non-recurring engineering services.

On September 14, 2021, the Company and its subsidiaries, 2864552 Ontario Inc. (Callco) and 2864555 Ontario Inc. (Canco), entered into an Arrangement Agreement (as amended, the Arrangement Agreement) with Peraso Technologies Inc. (Peraso Tech), a corporation existing under the laws of the province of Ontario, to acquire all of the issued and outstanding common shares of Peraso Tech (the Peraso Shares), including those Peraso Shares to be issued in connection with the conversion or exchange of secured convertible debentures and common share purchase warrants of Peraso Tech, as applicable, by way of a statutory plan of arrangement (the Arrangement) under the Business Corporations Act (Ontario). On December 17, 2021, following the satisfaction of the closing conditions set forth in the Arrangement Agreement, the Arrangement was completed and, the Company changed its name to “Peraso Inc.” and began trading on the Nasdaq Stock Market (the Nasdaq) under the symbol “PRSO.”

The accompanying condensed consolidated financial statements of the Company have been prepared without audit. The condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited consolidated financial statements at that date. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). The information in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in its most recent Annual Report on Form 10-K filed with the SEC.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to summarize fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any other future period.

Liquidity and Going Concern

The Company incurred net losses of approximately $3.5 million for the nine months ended September 30, 2025 and $10.7 million for the year ended December 31, 2024 and had an accumulated deficit of approximately $180.6 million as of September 30, 2025. These and prior year losses have resulted in significant negative cash flows and have required the Company to raise substantial amounts of additional capital. To date, the Company has primarily financed its operations through multiple offerings of its common stock and warrants and the issuance of convertible notes and loans to investors and affiliates.

The Company expects to continue to incur operating losses for the foreseeable future as it secures additional customers and continues to invest in the commercialization of its products. The Company will need to increase revenues substantially beyond levels that it has attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business without raising additional capital from time to time. As a result of the Company’s expected operating losses and cash burn for the foreseeable future, as well as recurring losses from operations, if the Company is unable to raise sufficient capital through additional debt or equity arrangements, there will be uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company’s ability to continue as a going concern within one year from the date of issuance of these condensed consolidated financial statements. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2024, expressed substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments that might result from this uncertainty. There can be no assurance that such additional capital, whether in the form of debt or equity financing, will be sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company. The Company is currently seeking additional financing in order to meet its cash requirements for the foreseeable future. If the Company is unsuccessful in these efforts, it will need to implement additional cost reduction strategies, which could further affect its near- and long-term business plan. These cost reduction strategies may include, but are not limited to, reducing headcount and curtailing business activities.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s fiscal year ends on December 31 of each calendar year. Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flows.

Reverse Stock Split

On December 15, 2023, the Company filed a certificate of amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Delaware to effect a 1-for-40 reverse stock split of the Company’s shares of common stock. Further, on January 2, 2024, Canco filed a certificate of amendment to its amended and restated certificate of incorporation under the Ontario Business Corporations Act to effect a 1-for-40 reverse stock split of the outstanding exchangeable shares. Such amendments and ratio were previously approved by the Company’s stockholders and board of directors.

As a result of the reverse stock split, which was effective for trading purposes on January 3, 2024, every 40 shares of the Company’s pre-reverse split outstanding common stock and exchangeable shares were combined and reclassified into one share of common stock. Proportionate voting rights and other rights of holders of common stock and exchangeable shares were not affected by the reverse stock split. Any fractional shares of common stock and exchangeable shares resulting from the reverse stock split were rounded up to the nearest whole share. All stock options and restricted stock units outstanding and common stock reserved for issuance under the Company’s equity incentive plans and warrants outstanding immediately prior to the reverse stock split were adjusted by dividing the number of affected shares of common stock by 40 and, as applicable, multiplying the exercise price by 40, as a result of the reverse stock split. All share and per-share amounts in these condensed consolidated financial statements have been restated to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.

Risks and Uncertainties

The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, the volatility of public markets, rapidly changing customer requirements, limited operating history, tariffs, pandemics, wars and acts of terrorism. The Company may be unable to access the capital markets, and additional capital may only be available to the Company on terms that could be significantly detrimental to its existing stockholders and to its business.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses recognized during the reported period. Material estimates may include assumptions made in determining reserves for uncollectible receivables, inventory write-downs, impairment of long-term assets, valuation allowance on deferred tax assets, accruals for potential liabilities and assumptions made in valuing equity instruments and warrant liabilities. Actual results could differ from those estimates.

Cash Equivalents and Investments

The Company has invested its cash in money market accounts, certificates of deposit, corporate debt, government-sponsored enterprise bonds and municipal bonds and considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Investments with original maturities greater than three months and remaining maturities less than one year are classified as short-term investments. Investments with remaining maturities greater than one year are classified as long-term investments. Management generally determines the appropriate classification of securities at the time of purchase. All securities are classified as available-for-sale. The Company’s available-for-sale short-term and long-term investments are carried at fair value, with the unrealized holding gains and losses reported in accumulated other comprehensive income (loss). Realized gains and losses and declines in the value judged to be other-than-temporary are included in the other income, net line item in the condensed consolidated statements of operations. The cost of securities sold is based on the specific identification method.

Fair Value Measurements

The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

Level 1—Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2—Pricing is provided by third party sources of market information obtained through the Company’s investment advisors, rather than models. The Company does not adjust for, or apply, any additional assumptions or estimates to the pricing information it receives from advisors. The Company’s Level 2 securities include cash equivalents and available-for-sale securities, which consisted primarily of certificates of deposit, corporate debt, and government agency and municipal debt securities from issuers with high-quality credit ratings. The Company’s investment advisors obtain pricing data from independent sources, such as Standard & Poor’s, Bloomberg and Interactive Data Corporation, and rely on comparable pricing of other securities because the Level 2 securities are not actively traded and have fewer observable transactions. The Company considers this the most reliable information available for the valuation of the securities.

Level 3—Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment are used to measure fair value. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 investments and other financial instruments involves the most management judgment and subjectivity.

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, accounts payable, and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates. The Company measures the fair value of its warrant liabilities using Level 3 inputs.

Derivatives and Liability-Classified Instruments

The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and the guidance provided by the Financial Accounting Standards Board (FASB) in Accounting Standards Codification (ASC) 480, Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the holders of the warrants could potentially require net cash settlement in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

Allowance for Doubtful Accounts

The Company establishes an allowance for doubtful accounts to ensure that its trade receivables balances are not overstated due to uncollectibility. The Company performs ongoing customer credit evaluations within the context of the industry in which it operates and generally does not require collateral from its customers. A specific allowance of up to 100% of the invoice value is provided for any problematic customer balances. Delinquent account balances are written off after management has determined that the likelihood of collection is remote. The Company grants credit only to customers deemed creditworthy in the judgment of management. The allowance for doubtful accounts receivable was approximately $16,500 and $30,000 as of September 30, 2025 and December 31, 2024, respectively.

Inventories

The Company values its inventories at the lower of cost, which approximates actual cost on a first-in, first-out basis, or net realizable value. Costs of inventories primarily consisted of material and third party assembly costs. The Company records write-downs for estimated obsolescence or unmarketable inventories based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those expected by management, additional adjustments to inventory valuation may be required. Charges for obsolete and slow-moving inventories are recorded based upon an analysis of specific identification of obsolete inventory items and quantification of slow moving inventory items. If the Company’s recognition of excess or obsolete inventory is, or if its estimates of potential utility become, less favorable than currently expected, inventory write-downs may be required.

Intangible and Long-lived Assets

Intangible assets are recorded at cost and amortized on a straight-line method over their estimated useful lives of three to ten years. Amortization of developed technology and other intangibles directly related to the Company’s products is included in cost of net revenue, while amortization of customer relationships and other intangibles not associated with the Company’s products is included in selling, general and administrative expense in the condensed consolidated statements of operations.

The Company regularly reviews the carrying value and estimated lives of its long-lived assets and finite-lived intangible assets to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objective. Should an impairment exist, the impairment loss would be measured based on the excess of the carrying amount of the long-lived asset group over the asset’s fair value.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, and its amendments (ASC 606). As described below, the analysis of contracts under ASC 606 supports the recognition of revenue at a point in time, resulting in revenue recognition timing that is materially consistent with the Company’s historical practice of recognizing product revenue when title and risk of loss pass to the customer.

The Company generates revenue primarily from sales of integrated circuits and antenna module products, performance of engineering services and licensing of its intellectual property. Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

Product revenue

Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company’s contracts have a single performance obligation to transfer products. Accordingly, the Company recognizes revenue when title and risk of loss have been transferred to the customer, generally at the time of shipment of products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon a negotiated, formula, list or fixed price. The Company sells its products both directly to customers and through distributors generally under agreements with payment terms typically 60 days or less.

The Company may record an estimated allowance, at the time of shipment, for future returns and other charges against revenue consistent with the terms of sale.

Royalty and other revenue

Historically, the Company’s licensing contracts for its memory technology typically provided for royalties based on the licensee’s use of the Company’s memory technology in its currently shipping commercial products. The Company estimates its royalty revenue in the calendar quarter in which the licensee uses the licensed technology. Payments are received in the subsequent quarter. The Company also generates revenue from licensing its technology. The Company recognizes license fees as revenue at the point of time when the control of the license has been transferred and the Company has no continuing performance obligations to the customer.

Engineering services revenue

Engineering and development contracts with customers generally contain a single performance obligation that is delivered over time. Revenue is recognized using an output method that is consistent with the satisfaction of the performance obligation as a measure of progress.

Contract liabilities – deferred revenue

The Company’s contract liabilities consist of advance customer payments and deferred revenue. The Company classifies advance customer payments and deferred revenue as current or non-current based on the timing of when the Company expects to recognize revenue. As of September 30, 2025 and December 31, 2024, contract liabilities were in a current position and included in deferred revenue.

During the nine months ended September 30, 2025, the Company recognized approximately $333,400 of revenue that had been included in deferred revenue as of December 31, 2024.

See Note 6 for disaggregation of revenue by geography.

The Company does not have significant financing components, as payments from customers are typically due within 60 days of invoicing, and the Company has elected the practical expedient to not value financing components that are less than one year. Shipping and handling costs are generally incurred by the customer, and, therefore, are not recorded as revenue.

Cost of Net Revenue

Cost of net revenue consists primarily of direct and indirect costs of product sales, including amortization of intangible assets and depreciation of production-related fixed assets.

Stock-Based Compensation

The Company periodically issues stock options and restricted stock units (RSUs) to employees and non-employees. The Company accounts for such awards based on ASC 718, whereby the value of the award is measured on the date of award and recognized as compensation expense on a straight-line basis over the vesting period. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing (Black Scholes) model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes model. The assumptions used in the Black-Scholes model could materially affect compensation expense recorded in future periods. The fair value of restricted stock awards, restricted stock units, and performance-based restricted stock units is based on the closing price of the Company’s common stock on the date of grant. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services.

Foreign Currency Transactions

The functional currency of the Company is the U.S. dollar. All foreign currency transactions are initially measured and recorded in an entity’s functional currency using the exchange rate on the date of the transaction. All monetary assets and liabilities are remeasured at the end of each reporting period using the exchange rate at that date. All non-monetary assets and related expense, depreciation or amortization are not subsequently remeasured and are measured using the historical exchange rate. An average exchange rate may be used to recognize income and expense items earned or incurred evenly over a period. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the statement of operations, except for the gains and losses arising from the conversion of the carrying amount of the foreign currency denominated convertible preferred shares into the functional currency that are presented as adjustment to the net loss to arrive at net loss attributable to common stockholders.

Per-Share Amounts

Basic net loss per share is computed by dividing net loss for the period by the weighted-average number of exchangeable shares and shares of common stock outstanding during the period. In addition, the Company includes the number of issuable shares and shares of common stock issuable upon exercise of pre-funded warrants as outstanding. Diluted net loss per share gives effect to all potentially dilutive exchangeable and common shares outstanding during the period. Potentially dilutive common shares consist of incremental exchangeable shares and shares of common stock issuable upon the achievement of escrow terms, exercise of stock options, vesting of stock awards and exercise of warrants.

The following table sets forth securities outstanding that were excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive (in thousands):

	Nine months ended
	September 30,
	2025		2024
Escrow shares - exchangeable shares		33		33
Escrow shares - common stock		13		13
Options to purchase common stock		1,334		33
Unvested restricted common stock units		3		9
Warrants classified as equity		8,837		8,094
Warrants classified as liabilities		235		235
Total		10,455		8,417

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The standard is effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028, with early adoption permitted. The standard may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact that this ASU will have on the presentation of its consolidated financial statements.

Other recent authoritative guidance issued by the FASB (including technical corrections to the ASCs), the American Institute of Certified Public Accountants, and the SEC did not, or is not expected to, have a material impact on the Company’s consolidated financial statements and related disclosures.

Note 2. Fair Value of Financial Instruments

The following tables represent the Company’s assets and liabilities measured at fair value on a recurring basis and the basis for that measurement (in thousands):

	September 30, 2025
	Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds (1)	$	1	$	—	$	—	$	—

Liabilities:
Warrant liabilities	$	65	$	—	$	—	$	65

	December 31, 2024
	Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds (1)	$	1	$	—	$	—	$	—

Liabilities:
Warrant liabilities	$	55	$	—	$	—	$	55

(1)	Amounts are included in cash and cash equivalents on the condensed consolidated balance sheets.

The following tables represent the Company’s determination of fair value for its financial assets (cash equivalents) (in thousands):

	September 30, 2025
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents	$	1,865	$	—	$	—	$	1,865

	December 31, 2024
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents	$	3,344	$	—	$	—	$	3,344

Note 3. Balance Sheet Detail

	September 30,		December 31,
	2025		2024
	(in thousands)
Inventories:
Raw materials	$	422	$	627
Work-in-process		678		473
Finished goods		474		979
	$	1,574	$	2,079

	September 30,		December 31,
	2025		2024
	(in thousands)
Accrued Expenses and Other:
Accrued wages and employee benefits	$	349	$	457
Professional fees, legal and consulting		326		223
Software license obligations		56		1,118
Severance benefits		—		118
Warranty accrual		18		34
Other		152		37
	$	901	$	1,987

Note 4. Severance and Software License Obligations

In November 2023, the Company implemented an employee lay-off and terminated certain consulting positions (the Reductions) to reduce operating expenses and cash burn, as the Company prioritized business activities and projects that it believes will have a higher return on investment. As part of the Reductions, the Company implemented a temporary lay-off that impacted 16 employees (the Employees) of Peraso Tech. During the six months ended June 30, 2024, the Company determined that it would not recall any of the 11 Employees that remained on the Company’s payroll and commenced notifying the remaining Employees that their employment would be terminated. As a result of the termination of the Employees’ employment, the Company recorded severance charges of approximately $446,000 during the six months ended June 30, 2024. The severance liabilities were fully paid as of September 30, 2025.

As a result of the decision to not recall the Employees, the Company determined that it was probable that a number of its non-cancelable licenses for computer-aided design software would not be utilized during the remaining license terms. During the three months ended June 30, 2024, the Company accrued the value of the remaining contractual liabilities of approximately $1,617,000. During the three months ended June 30, 2025, a licensor terminated one of the license agreements and initiated a refund of approximately $56,300 for amounts previously paid by the Company. As a result, the Company reversed approximately $222,600 of expense and approximately $166,300 of related contractual liabilities during the three months ended June 30, 2025. As of September 30, 2025, the remaining contractual liabilities of approximately $0.2 million were included in accounts payable and are expected to be paid by December 31, 2025.

Note 5. Commitments and Contingencies

Leases

The Company has operating leases for its facilities in Toronto and Markham, Ontario, Canada and recognizes lease expense on a straight-line basis over the respective lease terms. The Company had an operating lease for its corporate headquarters facility in San Jose, California that was not renewed when the lease term expired on January 14, 2025.

In December 2024, the Company renewed the Toronto office lease for a one-year term, which commenced January 1, 2025, and the Company ceased accounting for the lease under ASC 842.

In May 2022, the Company entered into a lease for the facility in Markham with a 60-month term, which commenced June 21, 2022. The initial right-of-use asset and corresponding liability of approximately CAD$1.0 million for the Markham facility lease were measured at the present value of the future minimum lease payments. The discount rate used to measure the lease assets and liabilities was 8%. The Markham landlord also provided a lease incentive of approximately CAD$286,200 (the Incentive). In 2023, the Company received payment of CAD$143,100 from the Markham landlord of the first installment of the Incentive. The remaining balance of the Incentive is paid to the Company in the form of an adjustment to rent during the last three months of each calendar year during the remaining lease term. As of September 30, 2025, the pending Incentive to be received was CAD$71,550.

On March 1, 2022, the Company entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of a right-of-use asset and lease liability of approximately $274,000. On March 1, 2025, the finance lease expired, and the Company took ownership of the equipment and the related right of use asset and liability was fully amortized.

On November 1, 2022, the Company entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of a right-of-use asset of approximately $124,000 and lease liability of approximately $117,000. The final invoice was dated August 15, 2025. The finance lease expired and the Company took ownership of the equipment. The related right-of-use asset and liability will be fully amortized on October 15, 2025.

The following table provides the details of right-of-use assets and lease liabilities as of September 30, 2025 (in thousands):

Right-of-use assets:
Operating leases	$	161
Total right-of-use assets	$	161
Lease liabilities:
Operating leases	$	192
Total lease liabilities	$	192

Future minimum payments under the leases at September 30, 2025 are listed in the table below (in thousands):

Year ending December 31,
2025	$	7
2026		105
2027		98
Total future lease payments		210
Less: imputed interest		(18	)
Present value of lease liabilities	$	192

The following table provides the details of supplemental cash flow information (in thousands):

	Nine Months Ended September 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for leases	$	154	$	319

Rent expense was approximately $0.1 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively. Rent expense was approximately $0.4 million for each of the nine-months ended September 30, 2025 and 2024. In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs related to the leased facilities and equipment.

Indemnification

In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has also entered into indemnification agreements with its officers and directors. No material amounts were reflected in the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024 related to these indemnifications.

The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances applicable to each particular agreement. To date, the Company has not made any payments related to these indemnification agreements.

Product Warranties

The Company warrants certain of its products to be free of defects generally for a period of three years. The Company estimates its warranty costs based on historical warranty claim experience and includes such costs in cost of net revenues. Warranty costs were not material for the three and nine months ended September 30, 2025 and 2024.

Legal Matters

The Company is not a party to any legal proceeding that the Company believes is likely to have a material adverse effect on its condensed consolidated financial position or results of operations. From time to time the Company may be subject to legal proceedings and claims in the ordinary course of business. These claims, even if not meritorious, could result in the expenditure of significant financial resources and diversion of management efforts.

Purchase Obligations

The Company’s primary purchase obligations include non-cancelable purchase orders for inventory. At September 30, 2025, the Company had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $2.7 million.

Note 6. Business Segments, Concentration of Credit Risk and Significant Customers

Segment Information

The Company determines its reporting units in accordance with ASC No. 280, Segment Reporting (ASC 280), as amended by ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which the Company adopted effective December 31, 2024. Management evaluates a reporting unit by first identifying its operating segments under ASC 280. The Company then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated.

The Company’s chief executive officer is the chief operating decision maker (CODM), and the CODM evaluates financial performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis, including consolidated net income (loss). Because the CODM evaluates financial performance on a consolidated basis, the Company operates and manages its business as one reportable and operating segment as a fabless semiconductor company focused on the development and sale of mmWave wireless technology, semiconductor devices and antenna modules, the performance of non-recurring engineering, or NRE, services and the licensing of intellectual property. The measure of segment assets is reported on the balance sheet as total consolidated assets. The Company’s reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments.

Significant segment expenses include research and development expenditures, salaries and benefits, stock-based compensation and software license obligations. Operating expenses include all remaining costs necessary to operate the Company’s business, which primarily include facilities, external professional services and other administrative expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by the CODM:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Total net revenue	$	3,234		$	3,841		$	9,323		$	10,895

Less:
Cost of net revenue		1,417			2,034			3,753			5,431
Research and development		513			673			1,726			2,731
Salaries		1,422			1,552			4,387			4,687
Stock-based compensation		131			959			397			3,336
Severance and software license obligations		—			—			(223	)		2,063
Other operating expenses		941			1,323			2,764			3,453
Other (income) expense, net		20			12			29			(1,638	)
Net loss	$	(1,210	)	$	(2,712	)	$	(3,510	)	$	(9,168	)

Concentrations

The Company recognized revenue from shipments of products, licensing of its technologies and performance of services to customers by geographical destination as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Taiwan	$	1,600	$	24	$	3,190	$	185
Europe		1,153		77		2,886		832
North America		285		3,680		2,064		9,219
Hong Kong		7		25		15		471
Rest of the world		189		35		1,168		188
Total net revenue	$	3,234	$	3,841	$	9,323	$	10,895

The following is a breakdown of product revenue by category (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
Product category	2025		2024		2025		2024
Memory ICs	$	72	$	3,677	$	2,339	$	9,487
mmWave ICs		2,276		67		4,569		272
mmWave modules		658		60		2,102		817
mmWave other products		56		7		70		20
	$	3,062	$	3,811	$	9,080	$	10,596

The following table lists significant customers that represented more than 10% of total revenue during each respective period:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Customer A		34	%		*			16	%		*
Customer B		20	%		*			15	%		*
Customer C		15	%		*			17	%		*
Customer D		15	%		*			15	%		*
Customer E		*			68	%		18	%		58	%
Customer F		*			25	%		*			23	%

*	Represents less than 10%

The following table lists significant customers that represented more than 10% of the net accounts receivable balance at each respective balance sheet date:

	September 30,			December 31,
	2025			2024
Customer A		40	%		*
Customer B		36	%		*
Customer C		13	%		*
Customer D		*			58	%
Customer E		*			18	%
Customer F		*			15	%

*	Represents less than 10%

The following table lists significant vendors that represented more than 10% of the total accounts payable balance at each respective balance sheet date:

	Accounts Payable
	September 30,			December 31,
	2025			2024
Vendor A		17	%		*
Vendor B		14	%		*
Vendor C		11	%		*
Vendor D		10	%		15	%
Vendor E		*			16	%

*	Represents less than 10%

Note 7. Stock-Based Compensation

Common Stock Equity Plans

In 2010, the Company adopted the 2010 Equity Incentive Plan and later amended it in 2014, 2017 and 2018 (the Amended 2010 Plan). The Amended 2010 Plan was terminated in August 2019 and remains in effect as to outstanding equity awards granted prior to the date of expiration. No new awards may be made under the Amended 2010 Plan.

In August 2019, the Company’s stockholders approved the 2019 Stock Incentive Plan (the 2019 Plan) to replace the Amended 2010 Plan. The 2019 Plan authorizes the board of directors or the compensation committee of the board of directors to grant a broad range of awards including stock options, stock appreciation rights, restricted stock, performance-based awards, and restricted stock units. Under the 2019 Plan, 4,563 shares were initially reserved for issuance. In November 2021 and December 2024, the Company’s stockholders approved amendments increasing the number of shares reserved for issuance under the 2019 Plan by 77,674 and 1,500,000 shares, respectively.

Under the 2019 Plan, the term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, awards under the 2019 Plan will vest over a three to four-year period, and options will have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control of the Company.

In December 2021, the Company assumed the Peraso Technologies Inc. 2009 Share Option Plan (the 2009 Plan) and all outstanding options granted pursuant to the terms of the 2009 Plan. Each outstanding, unexercised and unexpired option under the 2009 Plan, whether vested or unvested, was assumed by the Company and converted into options to purchase shares of the Company’s common stock and became exercisable by the holder of such option in accordance with its terms. No further awards will be made under the 2009 Plan.

The 2009 Plan, the Amended 2010 Plan and the 2019 Plan are referred to collectively as the “Plans.”

Stock-Based Compensation Expense

The Company reflected compensation costs related to the vesting of stock options of $0.4 million and $2.7 million during the nine-months ended September 30, 2025 and 2024, respectively. At September 30, 2025, the unamortized compensation cost was approximately $0.7 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately 2.0 years. The Company reflected compensation costs of approximately $30,000 and $0.6 million related to the vesting of restricted stock units during the nine-months ended September 30, 2025 and 2024, respectively. The unamortized compensation cost at September 30, 2025 was approximately $5,000 related to restricted stock units and is expected to be recognized as expense over a weighted average period of approximately 0.2 years. No stock options were granted or exercised during the nine months ended September 30, 2024.

Valuation Assumptions and Expense Information for Stock-Based Compensation

The fair value of the Company’s share-based payment awards for the nine months ended September 30, 2025 was estimated on the grant dates using the Black-Scholes model with the following assumptions:

	Option Grants
Grant Date		02/11/25			08/07/25
Interest rate (risk-free rate)		4.34	%		3.79	%
Expected volatility		119	%		118	%
Expected term		4.38 years			4.75 years
Expected dividend		0	%		0	%
Fair value (in thousands)	$	832		$	69

The risk-free interest rate was derived from the U.S. Treasury Yield Curve Rates as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of the options. The expected volatility was based on the historical volatility of the Company’s stock price over the expected term of the options. The expected term of options granted was derived from historical data based on employee exercises and post-vesting employment termination behavior. A dividend yield of zero is applied because the Company has never paid dividends and has no intention to pay dividends in the near future. The Company accounts for forfeitures as they occur.

Common Stock Options and Restricted Stock

The term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, options granted under the 2019 Plan will vest over a three to four-year period and have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control (as defined in the 2019 Plan) of the Company.

The following table summarizes the activity in the shares available for grant under the Plans during the three and nine months ended September 30, 2025 and options outstanding as of September 30, 2025 (in thousands, except exercise price):

				Options Outstanding
							Weighted
	Shares						Average
	Available			Number of			Exercise
	for Grant			Shares			Prices
Balance as of December 31, 2024		1,544			30		$	130.14
Options granted		(1,325	)		1,325		$	0.78
RSUs granted		(2	)		—			—
Balance as of March 31, 2025		217			1,355		$	130.14
RSUs cancelled and returned to the 2019 Plan		1			—			—
Options exercised		—			(5	)	$	0.78
Options cancelled and returned to the 2019 Plan		95			(95	)	$	0.78
Balance as of June 30, 2025		313			1,255		$	3.54
Options granted		(100	)		100		$	0.84
Options exercised		—			(21	)	$	0.78
Options cancelled and returned to the 2019 Plan		1			(1	)	$	0.78
Balance as of September 30, 2025		214			1,333		$	3.36

The following table summarizes significant ranges of outstanding and exercisable options as of September 30, 2025 (in thousands, except contractual life and exercise price):

	Options Outstanding						Options Exercisable
			Weighted
			Average
			Remaining		Weighted				Weighted
			Contractual		Average				Average		Aggregate
	Number		Life		Exercise		Number		Exercise		Intrinsic
Range of Exercise Price	Outstanding		(in Years)		Price		Exercisable		Price		value
$0.00 - $1.00		1,303		9.40	$	0.78		224	$	0.78	$	106
$1.01 - $62.80		2		4.14	$	62.80		2	$	62.80		—
$62.81 - $599.60		28		5.28	$	110.11		28	$	110.21		—
$0.00 - $599.60		1,333		9.31	$	3.36		254	$	14.17	$	106

A summary of RSU activity under the Plans is presented below (in thousands, except for fair value):

				Weighted
				Average
	Number of			Grant-Date
	Shares			Fair Value
Non-vested shares as of December 31, 2024		2		$	37.69
Granted		2		$	1.00
Non-vested shares as of March 31, 2025		4		$	18.88
Vested		(1	)	$	42.65
Non-vested shares as of June 30, 2025		3		$	4.88
Vested		—			—
Non-vested shares as of September 30, 2025		3		$	3.59

Note 8. Stockholders’ Equity

February 2024 Public Offering

On February 6, 2024, the Company entered into an underwriting agreement (the Underwriting Agreement) with Ladenburg Thalmann & Co. Inc. (Ladenburg), as the sole underwriter, relating to the issuance and sale in a public offering (the Offering) of: (i) 480,000 shares of common stock, (ii) pre-funded warrants to purchase up to 1,424,760 shares of common stock, (iii) Series A warrants to purchase up to 3,809,520 shares of common stock, (iv) Series B warrants to purchase up to 3,809,520 shares of common stock, and (v) up to 285,714 additional shares of common stock, Series A warrants to purchase up to 571,428 shares of common stock and Series B warrants to purchase up to 571,428 shares of common stock that may be purchased pursuant to a 45-day option to purchase additional securities granted to Ladenburg by the Company. Ladenburg partially exercised this option on February 7, 2024 for 82,500 shares of common stock, Series A warrants to purchase up to 165,000 shares of common stock and Series B warrants to purchase up to 165,000 shares of common stock. The combined public offering price of each share of common stock, together with the accompanying Series A warrants and Series B warrants, was $2.10, less underwriting discounts and commissions. The combined public offering price of each pre-funded warrant, together with the accompanying Series A warrants and Series B warrants, was $2.099, less underwriting discounts and commissions. The Offering, including the additional shares of common stock, Series A warrants and Series B warrants sold pursuant to the partial exercise of Ladenburg’s option, closed on February 8, 2024.

The net proceeds from the Offering, including the additional shares of common stock, Series A warrants and Series B warrants sold pursuant to the partial exercise of Ladenburg’s option, after deducting underwriting discounts and commissions and other estimated Offering expenses payable by the Company and excluding any proceeds from the exercise of the Series A warrants, Series B warrants and pre-funded warrants, were approximately $3.4 million.

The Series A warrants have an exercise price of $2.25, were immediately exercisable upon issuance, and expire on February 8, 2029. The Series B warrants had an original exercise price of $2.25 per share, were immediately exercisable upon issuance, and expired on November 8, 2024. The Series B warrants had an initial expiration date of August 8, 2024, which was extended to November 8, 2024 pursuant to amendments to the Warrant Agency Agreement dated as of February 8, 2024 by and between the Company and the warrant agent, Equiniti Trust Company, LLC (the Warrant Agency Agreement) (see Note 9). The pre-funded warrants have an exercise price of $0.001 per share, were exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. As of December 31, 2024, the holders exercised all of the pre-funded warrants for 1,424,760 shares of common stock. The exercise price and number of shares of common stock issuable upon exercise of the warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the common stock and the exercise price. Subject to limited exceptions, a holder may not exercise any portion of its warrants to the extent that the holder would beneficially own more than 9.99% or 4.99% (at the election of the holder) of the Company’s outstanding common stock after exercise.

On February 8, 2024, pursuant to the Underwriting Agreement, the Company paid Ladenburg a cash fee of 9% of the gross proceeds received from the Offering and issued Ladenburg and its designees warrants to purchase up to an aggregate of 139,108 shares of common stock at an exercise price of $2.625, subject to adjustments, which were exercisable immediately and have substantially similar terms to the Series A warrants.

Shares Issued for Services

In January 2025, the Company issued 40,000 unregistered shares of common stock with a fair value of approximately $40,000 to a service provider.

ATM Offering

On August 30, 2024, the Company entered into an At The Market Offering Agreement (the Sales Agreement) with Ladenburg with respect to an “at the market” offering program, under which the Company may, from time to time, in its sole discretion, issue and sell through Ladenburg, acting as agent or principal, shares of the Company’s common stock. The Sales Agreement provides that Ladenburg will be entitled to compensation for its services equal to 3.0% of the gross proceeds from sales of any shares of common stock pursuant to the Sales Agreement in addition to the reimbursement of certain expenses. The Company has no obligation to sell any shares pursuant to the Sales Agreement and either the Company or Ladenburg may terminate the Sales Agreement in accordance with its terms. During the three and nine months ended September 30, 2025, the Company sold 733,049 and 2,003,207 shares of common stock for net proceeds of approximately $751,200 and $2,270,200, respectively, pursuant to the Sales Agreement.

Note 9. Warrants

2024 Warrant Inducement Offering

On August 6, 2024, the Company extended the expiration date of the Series B warrants issued in the Offering to October 7, 2024, by entering into an amendment to the Warrant Agency Agreement. On October 3, 2024, the Company extended the expiration date of the Series B warrants to November 8, 2024, by entering into a further amendment to the Warrant Agency Agreement.

On November 5, 2024, the Company entered into inducement offer letter agreements (the Inducement Letters) with certain holders (the Holders) of existing Series B warrants (the Existing Warrants) to purchase up to an aggregate of 2,246,030 shares of the Company’s common stock. Pursuant to the Inducement Letters, the Holders agreed to exercise for cash their Existing Warrants at a reduced exercise price of $1.30 per share in consideration for the Company’s agreement to issue in a private placement (i) new Series C common stock purchase warrants (the Series C Warrants) to purchase an aggregate of 2,246,030 shares of common stock and (ii) new Series D common stock purchase warrants (the Series D Warrants) to purchase an aggregate of 2,246,030 shares of common stock. The Series C Warrants have an exercise price of $1.61 per share, were exercisable upon issuance and originally expired on the nine-month anniversary of the date of issuance. The Series D Warrants have an exercise price of $1.61 per share, were exercisable upon issuance and expire on the five-year anniversary of the date of issuance.

The warrant inducement offering closed on November 6, 2024. Upon exercise of the Existing Warrants, the Company issued 1,328,650 shares of its common stock while the remaining 917,380 shares (the Issuable Shares) remained under abeyance, pending issuance instructions from the Holders, pursuant to the terms of the Inducement Letters. The Company accounted for the issuance of the: i) shares of its common stock, ii) the Series C Warrants, iii) the Series D Warrants, and iv) the remaining Issuable Shares as a single equity transaction for gross proceeds of approximately $2.92 million. The fair value of the unissued Issuable Shares at each balance sheet date has been presented separately as issuable shares on the condensed consolidated balance sheets and statements of stockholders’ equity. As of September 30, 2025, all of the Issuable Shares had been issued and no shares remained under abeyance.

Amendments to Series C Warrants

On May 2, 2025, the Company extended the expiration date of its Series C Warrants to purchase an aggregate of 2,246,030 shares of common stock from May 6, 2025 to August 4, 2025, by entering into an amendment with each holder of the Series C Warrants. On August 4, 2025, the Company extended the expiration date of its outstanding Series C Warrants to purchase an aggregate of 2,246,030 shares of common stock from August 4, 2025 to December 5, 2025, by entering into a second amendment with each holder of the Series C Warrants.

2025 Warrant Inducement Offering

On September 11, 2025, the Company entered into an inducement offer letter agreement (the 2025 Inducement Letter) with a holder (the Series C Holder) of Series C Warrants to purchase up to an aggregate of 952,380 shares of common stock. Pursuant to the 2025 Inducement Letter, the Series C Holder agreed to exercise for cash its Series C Warrants at a reduced exercise price of $1.18 per share in consideration for the Company’s agreement to issue in a private placement new Series E common stock purchase warrants (the Series E Warrants) to purchase an aggregate of 952,380 shares of common stock. The Series E Warrants have an exercise price of $1.25 per share, will be exercisable upon the six-month anniversary of the date of issuance and will have a term of exercise of 5.5 years from the initial exercise date.

The warrant inducement offering closed on September 12, 2025. Upon exercise of the Series C Warrants, the Company issued 115,000 shares of common stock while the remaining 837,380 shares (the 2025 Issuable Shares) remained under abeyance, pending issuance instructions from the Series C Holder, pursuant to the terms of the 2025 Inducement Letter. The Company accounted for the issuance of the: i) shares of common stock, ii) the Series E Warrants and iii) the remaining 2025 Issuable Shares as a single equity transaction for gross proceeds of approximately $1.1 million. The fair value of the unissued 2025 Issuable Shares has been presented separately as issuable shares on the condensed consolidated balance sheets and statements of stockholders’ equity.

In relation to the above warrant inducement offering, the Company engaged Ladenburg as placement agent and paid cash compensation of 9% of the gross proceeds. In addition, the Company issued Ladenburg and its designees warrants to purchase up to an aggregate of 66,667 shares of common stock at an exercise price of $1.475, which will be exercisable on the six-month anniversary of the date of issuance, expire on the five-year anniversary of the date of issuance, and include piggyback registration rights that are triggered if there is not an effective registration statement covering the resale of all of the shares issuable upon the exercise of the warrants while the warrants are outstanding. The remaining material terms of the warrants issued to Ladenburg and its designees are substantially similar to those of the Series E Warrants.

Warrants Classified as Liabilities

The securities purchase agreements governing warrants issued in registered direct offerings completed in November 2022 and June 2023 (collectively, the Purchase Warrants) provide for a value calculation for such warrants using the Black Scholes model in the event of certain fundamental transactions. The fair value calculation provides for a floor on the volatility amount utilized in the value calculation at 100% or greater. The Company has determined this provision introduces leverage to the holders of the Purchase Warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares. Therefore, pursuant to ASC 815, the Company has classified the Purchase Warrants as liabilities in its consolidated balance sheet. The classification of the Purchase Warrants, including whether the Purchase Warrants should be recorded as liabilities or as equity, is evaluated at the end of each reporting period with changes in the fair value reported in other income (expense) in the consolidated statements of operations.

As of September 30, 2025, the Company had the following Purchase Warrants outstanding (share amounts in thousands):

	Number of Shares		Exercise Price		Expiration Date
Warrants issued - November 2022		92	$	40.00	May 28, 2028
Warrants issued - June 2023		143	$	28.00	June 2, 2028
		235

The following table sets forth changes in the fair value of the Purchase Warrants outstanding (amounts in thousands):

	Number of Warrants
	on Common Shares		Amount
Balance as of December 31, 2024		235	$	55
Change in fair value of warrants		—		(35	)
Balance as of March 31, 2025		235	$	20
Change in fair value of warrants		—		29
Balance as of June 30, 2025		235	$	49
Change in fair value of warrants		—		16
Balance as of September 30, 2025		235	$	65

The outstanding Purchase Warrants had no intrinsic value at September 30, 2025.

The fair value of the Purchase Warrants at September 30, 2025 was determined using the Black Scholes model with the assumptions in the following table.

	2022 Purchase Warrant			2023 Purchase Warrant
Expected term based on contractual term		2.7 years			2.7 years
Interest rate (risk-free rate):		3.73	%		3.73	%
Expected volatility		134	%		133	%
Expected dividend		—			—
Fair value of warrants (in thousands)	$	29		$	36

The fair value of the Purchase Warrants at December 31, 2024 was determined using the Black Scholes model with the assumptions in the following table.

	2022 Purchase Warrant			2023 Purchase Warrant
Expected term based on contractual term		3.4 years			3.4 years
Interest rate (risk-free rate):		4.38	%		4.38	%
Expected volatility		115	%		117	%
Expected dividend		—			—
Fair value of warrants (in thousands)	$	25		$	30

Warrants Classified as Equity

As of September 30, 2025, the Company had the following equity-classified common stock purchase warrants outstanding (share amounts in thousands):

Warrant Type	Number of Shares		Exercise Price		Expiration
Common Stock Warrant		7	$	28.00	June 2, 2028
Series A warrants		3,975	$	2.250	February 8, 2029
Series A warrants		139	$	2.625	February 8, 2029
Series C warrants		1,294	$	1.610	December 5, 2025
Series C warrants		157	$	1.625	November 6, 2029
Series D warrants		2,246	$	1.610	November 6, 2029
Series E warrants		952	$	1.250	September 12, 2031
Series E warrants		67	$	1.475	September 12, 2030
Balance as of September 30, 2025		8,837

The outstanding equity-classified warrants had no intrinsic value at September 30, 2025.

Note 10. Related Party Transactions

A family member of one of the Company’s executive officers is an employee of the Company. The Company recorded compensation expense of approximately $31,200 and $30,300 for the employed family member during the three months ended September 30, 2025 and 2024, respectively. The Company recorded compensation expense of approximately $88,900 and $85,600 for the employed family member during the nine months ended September 30, 2025 and 2024, respectively.

Note 11. Memory IC Product End-of-Life

Taiwan Semiconductor Manufacturing Corporation, the sole foundry that manufactured the wafers used to produce the Company’s memory IC products, discontinued the foundry process used to produce such wafers. As a result, the Company commenced an end-of-life (EOL) of its memory products in 2023. In March 2025, the Company fulfilled all then-outstanding EOL orders for its memory IC products. Since March 2025, the Company received additional purchase orders totaling approximately $452,800 from customers for remaining inventory. The Company recorded approximately $72,000 of product revenue from these purchase orders during the three months ended September 30, 2025.

Note 12. Subsequent Events

Issuance of Common Stock under ATM Offering Program

Subsequent to September 30, 2025, the Company sold 929,737 shares of common stock for net proceeds of approximately $1,365,976 pursuant to the Sales Agreement (see Note 8).

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying condensed consolidated financial statements and notes included in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which include, without limitation, statements about the market for our technology, our strategies, competition, expected financial performance and capital raising efforts. Any statements about our business, financial results, financial condition and operations contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects” or similar expressions are intended to identify forward-looking statements. Our actual results could differ materially from those expressed or implied by these forward-looking statements as a result of various factors, including the risk factors described under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 and the risk factors described below under Part II, Item 1A of this Quarterly Report on Form 10-Q. We undertake no obligation to update publicly any forward-looking statements for any reason, except as required by law, even as new information becomes available or events occur in the future.

Overview

Our strategy and primary business objective is to be a profitable, IP-rich fabless semiconductor company offering integrated circuits, or ICs, antenna modules and related non-recurring engineering services. We specialize in the development of mmWave semiconductors, primarily in the unlicensed 60 GHz spectrum band for 802.11ad/ay-compliant devices and in the 28/39 GHz spectrum bands for 5G-compliant devices. We derive our revenue from selling semiconductor devices, as well as antenna modules based on using those mmWave semiconductor devices. We have pioneered a high-volume mmWave IC production test methodology using standard, low-cost production test equipment. It has taken us several years to refine performance of this production test methodology, and we believe this places us in a leadership position in addressing the operational challenges of delivering mmWave products into high-volume markets. We also produce and sell complete mmWave antenna modules. The primary advantage provided by our antenna modules is that our proprietary mmWave ICs and the antenna are integrated into a single device. A differentiating characteristic of mmWave technology is that the RF amplifiers must be as close as possible to the a

SEC Form 10-Q filed by Peraso Inc.