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 March 31, 2026

☐ 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 55,986 as of May 12, 2026.

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 14,686,618 as of May 12, 2026.

PERASO INC.

FORM 10-Q

For the Quarterly Period Ended March 31, 2026

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited):	1

	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	1

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025	2

	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025	3

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 4.	Controls and Procedures	33

PART II — OTHER INFORMATION		34

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

	Signatures	38

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PERASO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

	March 31,			December 31,
	2026			2025
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	2,672		$	2,886
Accounts receivable, net		867			1,219
Inventories, net		1,600			1,168
Prepaid expenses and other		534			195
Total current assets		5,673			5,468

Property and equipment, net		497			363
Right-of-use lease assets		124			143
Other		104			105
Total assets	$	6,398		$	6,079
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	895		$	679
Accrued expenses and other		605			540
Deferred revenue		102			8
Short-term lease liabilities		95			95
Total current liabilities		1,697			1,322

Long-term lease liabilities		64			97
Warrant liabilities		33			24
Total liabilities		1,794			1,443
Commitments and contingencies (Note 4)
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 March 31, 2026 and December 31, 2025		—			—
Common stock, $0.001 par value; 120,000 shares authorized; 12,582 shares and 10,055 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		11			9
Exchangeable shares, no par value; unlimited shares authorized; 56 shares outstanding at March 31, 2026 and December 31, 2025		—			—
Issuable shares, none and 137 shares at March 31, 2026 and December 31, 2025, respectively		—			162
Additional paid-in capital		188,963			186,338
Accumulated deficit		(184,370	)		(181,873	)
Total stockholders’ equity		4,604			4,636
Total liabilities and stockholders’ equity	$	6,398		$	6,079

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
	March 31,
	2026			2025
Net revenue
Product	$	667		$	3,800
Services and other		296			69
Total net revenue		963			3,869
Cost of net revenue		371			1,189
Gross profit		592			2,680
Operating expenses
Research and development		1,590			1,583
Selling, general and administrative		1,486			1,611
Total operating expenses		3,076			3,194
Loss from operations		(2,484	)		(514	)
Change in fair value of warrant liabilities		(9	)		35
Other income (expense), net		(4	)		8
Net loss	$	(2,497	)	$	(471	)

Net loss per share
Basic and diluted	$	(0.22	)	$	(0.08	)
Shares used in computing net loss per share
Basic and diluted		11,613			5,745

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

															Additional
	Common Stock				Issuable Shares						Exchangeable Shares				Paid-In		Accumulated
	Shares		Amount		Shares			Amount			Shares		Amount		Capital		Deficit			Total
Balance as of December 31, 2025		10,055	$	9		137		$	162			56	$	—	$	186,338	$	(181,873	)	$	4,636
At-the market sales of stock, net		2,372		2		—			—			—		—		2,302		—			2,304
Issuance of common stock under stock plans		18		—		—			—			—		—		14		—			14
Issuance of abeyance shares		137		—		(137	)		(162	)		—		—		162		—			—
Stock-based compensation		—		—		—			—			—		—		147		—			147
Net loss		—		—		—			—			—		—		—		(2,497	)		(2,497	)
Balance as of March 31, 2026		12,582	$	11		—		$	—			56	$	—	$	188,963	$	(184,370	)	$	4,604

													Additional
	Common Stock				Issuable Shares				Exchangeable Shares				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

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Three Months Ended
	March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(2,497	)	$	(471	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		50			67
Stock-based compensation		147			125
Change in fair value of warrant liabilities		9			(35	)
Shares issued for services		—			40
Inventory write downs		33			—
Other		(7	)		1
Changes in assets and liabilities
Accounts receivable		359			(91	)
Inventories		(465	)		307
Prepaid expenses and other assets		(339	)		(422	)
Accounts payable		216			225
Right-of-use assets		19			45
Lease liabilities - operating		(33	)		(26	)
Deferred revenue, accrued expenses and other		159			(731	)
Net cash used in operating activities		(2,349	)		(966	)
Cash flows from investing activities:
Purchases of property and equipment		(183	)		—
Net cash used in investing activities		(183	)		—
Cash flows from financing activities:
Proceeds from at-the-market sales of stock, net		2,304			433
Proceeds from exercises of stock options		14			—
Repayment of financing lease		—			(36	)
Net cash provided by financing activities		2,318			397
Net decrease in cash and cash equivalents		(214	)		(569	)
Cash and cash equivalents at beginning of period		2,886			3,344
Cash and cash equivalents at end of period	$	2,672		$	2,775

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, 2025 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 months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other future period.

Liquidity and Going Concern

The Company incurred net losses of approximately $2.5 million for the three months ended March 31, 2026 and $4.8 million for the year ended December 31, 2025 and had an accumulated deficit of approximately $184.4 million as of March 31, 2026. 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, management has concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern for a period of at least 12 months beyond the filing of this Quarterly Report on Form 10-Q. 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, 2025, 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 the Company can raise additional capital, whether in the form of debt or equity financing, that will be sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company. The Company’s primary focus is producing and selling its products. 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 efforts 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.

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 Credit Losses

The Company establishes an allowance for credit losses 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 credit losses was not material as of March 31, 2026 and December 31, 2025.

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.

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.

Services 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.

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 March 31, 2026 and December 31, 2025, contract liabilities were in a current position and included in deferred revenue.

During the three months ended March 31, 2026, the Company recognized an immaterial amount of revenue that had been included in deferred revenue as of December 31, 2025.

See Note 5 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):

	Three Months Ended March 31,
	2026		2025
Escrow shares - exchangeable shares		33		33
Escrow shares - common stock		13		13
Options to purchase common stock		2,221		1,355
Unvested restricted common stock units		200		4
Warrants classified as equity		7,543		8,770
Warrants classified as liabilities		235		235
Total		10,245		10,410

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.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (the “Update”), an amendment to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments add to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in this Update clarify interim disclosure requirements and the applicability of Topic 270 apply to all entities that provide interim financial statements and notes in accordance with GAAP. In addition, the amendments in this Update result in a comprehensive list of interim disclosures that are required by GAAP with the objective to provide clarity about the current requirements. The Update is effective for the Company for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Update can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact that the Update 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):

	March 31, 2026
	Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds (1)	$	1	$	—	$	—	$	—
Liabilities:
Warrant liabilities	$	33	$	—	$	—	$	33

	December 31, 2025
	Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds (1)	$	1	$	—	$	—	$	—
Liabilities:
Warrant liabilities	$	24	$	—	$	—	$	24

(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):

	March 31, 2026
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Cash and cash equivalents	$	2,672	$	—	$	—	$		2,672

	December 31, 2025
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents	$	2,886	$	—	$	—	$	2,886

Note 3. Balance Sheet Detail

	March 31,		December 31,
	2026		2025
	(in thousands)
Inventories:
Raw materials	$	300	$	342
Work-in-process		493		361
Finished goods		807		465
	$	1,600	$	1,168

	March 31,		December 31,
	2026		2025
	(in thousands)
Prepaid expenses and other:
Prepaid inventory and production costs	$	31	$	31
Prepaid insurance		194		36
Prepaid software		110		46
Other		199		82
	$	534	$	195

	March 31,		December 31,
	2026		2025
	(in thousands)
Accrued Expenses & Other:
Accrued wages and employee benefits	$	308	$	280
Professional fees, legal and consulting		192		175
Warranty accrual		8		12
Other		97		73
	$	605	$	540

Note 4. 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.

The lease for the facility in Markham has 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 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 December 31, 2025, the pending Incentive to be received was CAD$35,775.

The Toronto office lease has a one-year term, which commenced January 1, 2026, and the lease is not accounted for under ASC 842.

The following table provides the details of right-of-use assets and lease liabilities as of March 31, 2026 and December 31, 2025 (in thousands):

	March 31,		December 31,
	2026		2025
Right-of-use assets:
Operating leases	$	124	$	143
Total right-of-use assets	$	124	$	143
Lease liabilities:
Operating leases	$	159	$	192
Total lease liabilities	$	159	$	192

Future minimum payments under the Markham lease at March 31, 2026 are listed in the table below (in thousands):

Year ending December 31,
2026	$	72
2027		97
Total future lease payments		169
Less: imputed interest		(10	)
Present value of lease liabilities	$	159

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

	Three Months Ended March 31,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for leases	$	33	$	75

Rent expense was approximately $0.1 million for the three months ended March 31, 2026 and 2025. 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 months ended March 31, 2026 and 2025 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 months ended March 31, 2026 and 2025.

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 March 31, 2026, the Company had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $3.2 million.

Note 5. 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 (in thousands):

	Three Months Ended
	March 31,
	2026			2025
Total net revenue	$	963		$	3,869

Less:
Cost of net revenue		371			1,189
Research and development		569			603
Compensation		1,450			1,444
Stock-based compensation		147			126
Other operating expenses		910			1,021
Other income		13			(43	)
Net loss	$	(2,497	)	$	(471	)

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
	March 31,
	2026		2025
Taiwan	$	203	$	1,020
Europe		279		529
North America		136		1,771
Rest of world		345		549
Total net revenue	$	963	$	3,869

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

	Three Months Ended March 31,
Product category	2026		2025
Memory ICs	$	20	$	2,267
mmWave ICs		504		975
mmWave modules		111		558
mmWave other products		32		-
	$	667	$	3,800

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

	Three Months Ended
	March 31,
	2026			2025
Customer A		27	%		*
Customer B		17	%		*
Customer C		13	%		*
Customer D		11	%		25	%
Customer E		*			41	%
Customer F		*			13	%
Customer G		*			12	%

*	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:

	Accounts Receivable
	March 31,			December 31,
	2026			2025
Customer A		51	%		*
Customer B		22	%		*
Customer C		11	%		78	%
Customer D		*			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
	March 31,			December 31,
	2026			2025
Vendor A		18	%		23	%
Vendor B		11	%		*
Vendor C		11	%		*
Vendor D		*			15	%
Vendor E		*			15	%

*	Represents less than 10%

Note 6. 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, December 2024 and December 2025, the Company’s stockholders approved amendments increasing the number of shares reserved for issuance under the 2019 Plan by 77,674, 1,500,000, and 1,000,000 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 approximately $0.1 million and $0.1 million during the three-month ended March 31, 2026 and 2025, respectively. At March 31, 2026, the unamortized compensation cost was approximately $1.2 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately 1.2 years. The Company reflected compensation costs of approximately $44,000 and $17,000 related to the vesting of restricted stock units during the three-months ended March 31, 2026 and 2025, respectively. The unamortized compensation cost at March 31, 2026 was approximately $0.1 million related to restricted stock units and is expected to be recognized as expense over a weighted average period of approximately 0.8 years.

Valuation Assumptions and Expense Information for Stock-Based Compensation

The fair value of the Company’s option grants for the three months ended March 31, 2026 and March 31, 2025 was approximately $656,000 and $832,000, respectively. The weighted-average grant date fair value of options granted was $0.73 and $0.63 per share for the three months ended March 31, 2026 and 2025, respectively. The following assumptions were used in the fair-value method calculations:

	Option Grants
	Three Months Ended March 31,
	2026			2025
Interest rate (risk-free rate)		3.70% - 3.75	%		4.34	%
Expected volatility		120% - 121	%		119	%
Expected term		5 years			4.38 years
Expected dividend		0	%		0	%

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 Units

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 months ended March 31, 2026 and options outstanding as of March 31, 2026 (in thousands, except exercise price):

				Options Outstanding
							Weighted
	Shares						Average
	Available			Number of			Exercise
	for Grant			Shares			Prices
Balance as of December 31, 2025		1,189			1,347		$	3.34
RSUs granted		(200	)		—			—
Options granted		(893	)		893		$	0.88
Options exercised		—			(18	)	$	0.78
Balance as of March 31, 2026		96			2,222		$	2.33

The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2026 (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		2,192		9.30	$	0.82		442	$	0.79	$	99
$1.01 - $62.90		2		3.64	$	62.80		2	$	62.80	$	—
$62.81 - $599.60		28		4.77	$	108.50		28	$	108.50	$	—
$0.00 - $599.60		2,222		9.24	$	2.33		472	$	7.86	$	99

The total options outstanding had an intrinsic value of $0.4 million.

A summary of RSU activity under the 2019 Plan 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, 2025		—		—
Granted		200	$	0.94
Non-vested shares as of March 31, 2026		200	$	0.94

Note 7. 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 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.

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. On November 21, 2025, the Company filed a prospectus supplement to increase the maximum number of shares of the Company’s common stock up to an aggregate of $3,150,000 of shares, which did not include the shares having an aggregate gross sales price of approximately $4,095,176 that had previously been sold under the Sales Agreement. 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 year ended December 31, 2024, the Company sold 251,621 shares of common stock for net proceeds of approximately $336,000 pursuant to the Sales Agreement. During the year ended December 31, 2025, the Company sold 3,713,939 shares of common stock for net proceeds of approximately $4,351,100 pursuant to the Sales Agreement. During the three months ended March 31, 2026, the Company sold 2,371,943 shares of common stock for net proceeds of approximately $2,303,484, pursuant to the Sales Agreement.

Note 8. Warrants

Amendments to Series C Warrants

On May 2, 2025, the Company extended the expiration date of its Series C warrants, which were issued in November 2024, 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. On December 5, 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 December 5, 2025 to January 7, 2026, by entering into a third amendment with each holder of the Series C warrants. In September 2025, the Company effected a warrant inducement offering, and certain of the Series C shares were exercised. On January 7, 2026, the remaining 1,293,650 Series C warrants expired.

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 March 31, 2026, 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, 2025		235	$	24
Change in fair value of warrants		—		9
Balance as of March 31, 2026		235	$	33

The outstanding Purchase Warrants had no intrinsic value at March 31, 2026.

The fair value of the Purchase Warrants at March 31, 2026 was determined using the Black Scholes model with the following assumptions:

	2022 Purchase Warrant			2023 Purchase Warrant
Expected term based on contractual term		2.2 years			2.2 years
Interest rate (risk-free rate):		3.94	%		3.94	%
Expected volatility		137	%		137	%
Expected dividend		—			—
Fair value of warrants (in thousands)	$	15		$	18

The fair value of the Purchase Warrants at December 31, 2025 was determined using the Black Scholes model with the following assumptions:

	2022 Purchase Warrant			2023 Purchase Warrant
Expected term based on contractual term		2.4 years			2.4 years
Interest rate (risk-free rate):		3.71	%		3.71	%
Expected volatility		129	%		129	%
Expected dividend		—			—
Fair value of warrants (in thousands)	$	11		$	13

Warrants Classified as Equity

As of March 31, 2026, 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 warrants		7		$	28.00		June 2, 2028
Series A warrants issued		3,975		$	2.250		February 8, 2029
Series A warrants issued		139		$	2.625		February 8, 2029
Series C warrants issued		2,246		$	1.610		January 7, 2026
Series C warrants exercised		(952	)	$	1.610		—
Series C warrants expired		(1,294	)	$	1.610		—
Series C warrants issued		157		$	1.625		November 6, 2029
Series D warrants issued		2,246		$	1.610		November 6, 2029
Series E warrants issued		952		$	1.250		September 12, 2031
Series E warrants issued		67		$	1.475		September 12, 2030
Balance as of March 31, 2026		7,543

The outstanding equity-classified warrants had no intrinsic value at March 31, 2026.

Note 9. 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 $38,300 and $41,600 for the employed family member during the three months ended March 31, 2026 and 2025, respectively, which includes the aggregate grant date fair values, as determined pursuant to FASB ASC Topic 718, of any stock options during each period.

Note 10. 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. During the three months ended March 31, 2026, the Company recorded approximately $20,000 of product revenue.

Note 11. Subsequent Events

Issuance of Common Stock under ATM Offering Program

On April 10, 2026, the Company filed a prospectus supplement to its registration statement on Form S-3 to increase the maximum number of shares of common stock available for sale under the Sales Agreement on such date to $2,125,000, exclusive of previously sold shares. Subsequent to March 31, 2026, the Company has sold 2,104,742 shares of common stock for net proceeds of approximately $2,061,205 pursuant to the Sales Agreement.

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, 2025 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 antenna to minimize loss. Our module is designed to enhance the performance of the amplifier/antenna interface and simplify customers’ radio frequency (“RF”) engineering, facilitating more opportunities for customer prospects that have not provided RF-type systems, as well as shortening the time to market for new products.

We also had a memory product line comprising our Bandwidth Engine IC products. Taiwan Semiconductor Manufacturing Corporation, or TSMC, the sole foundry that manufactured the wafers used to produce our memory IC products, discontinued the foundry process used to produce such wafers. As a result, in May 2023, we initiated an end-of-life, or EOL, of our memory IC products, and, in March 2025, we fulfilled all then-outstanding EOL orders for our memory IC products. Subsequent to March 2025, we received additional purchase orders and recorded revenue totaling approximately $0.5 million during the second half of 2025. During the three months ended March 31, 2026, we received an additional purchase order and recorded revenue totaling approximately $20,000.

We incurred net losses of approximately $2.5 million for the three months ended March 31, 2026 and $4.8 million for the year ended December 31, 2025, and we had an accumulated deficit of approximately $184.4 million as of March 31, 2026. These and prior year losses have resulted in significant negative cash flows and historically have required us to raise substantial amounts of additional capital. As discussed below, this raises significant doubt about our ability to continue as a going concern. We will need to increase revenues substantially beyond levels that we have 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.

Recent Developments

Unsolicited, Non-binding Proposal from Mobix Labs, Inc.; Strategic Review Process

On June 27, 2025, we confirmed in a public press release the receipt of an unsolicited, non-binding proposal from Mobix Labs, Inc. (“Mobix Labs”) to acquire all of the Company’s issued and outstanding equity securities in exchange for newly issued shares of Mobix Labs common stock, with a fixed exchange ratio based on the average daily closing price of our common stock over the 30 calendar days ending on June 11, 2025, plus a 20% premium, or approximately $1.20 per share.

On July 11, 2025, we issued a press release announcing the initiation of the strategic review process. Following this, our financial advisor contacted potential counterparties to invite them to participate in the process subject to such parties’ execution of our standard non-disclosure agreement, which includes a standstill provision. Our financial advisor also contacted Mobix Labs to request that Mobix Labs execute our non-disclosure agreement in order to participate in the process, which Mobix Labs declined to execute.

On August 19, 2025, we issued a public press release providing an update on our strategic review process, including our engagement with potential counterparties and our continued openness to engaging with Mobix Labs and others, while noting that Mobix Labs declined to enter into our standard non-disclosure agreement and indicated it would not agree to receive material non-public information (“MNPI”).

On September 8, 2025, we issued a press release providing another update on our strategic review process, including regarding the two letters that we received from Mobix Labs, dated as of September 4, 2025, and September 5, 2025, in connection with its unsolicited offer to acquire all outstanding shares of the Company. The September 4 letter included a revised acquisition proposal involving a combination of cash and stock consideration in an undetermined amount, and a reiteration of Mobix Labs’ refusal to enter into a confidentiality agreement or receive MNPI from us. The September 5 follow-up letter stated that while Mobix Labs continued to oppose any standstill restrictions, it would be willing to consider a limited confidentiality arrangement to permit us to share MNPI deemed reasonably necessary, provided that such arrangement did not include a standstill and did not indefinitely constrain Mobix Labs. In response to such letters, we authorized a limited exploratory call with Mobix Labs, and we requested that any such discussion take place without us sharing any MNPI and outside the bounds of a confidentiality agreement, which exploratory call would serve to allow us to better understand Mobix Labs’ revised proposal and intentions.

On September 11, 2025, following the limited exploratory call with Mobix Labs on September 10, 2025, Mobix Labs issued a public statement describing the discussions had in such limited exploratory call and announcing an enhanced proposal of approximately 30% cash and 70% Mobix Labs common stock. Then, on September 12, 2025, we issued a press release to provide clarification to all stockholders relating to such public statements made by Mobix Labs, including that we did not respond to Mobix Labs’ proposal and that we did not agree to continue discussions with Mobix Labs during the call, and we sent a letter to Mobix Labs to clarify our position.

On September 13, 2025, Mobix Labs filed a Form 425 with the SEC and issued a related press release announcing its intent to commence a hostile exchange offer to acquire all outstanding shares of the Company. In the press release, Mobix Labs stated that the proposed offer is expected to consist of a mix of cash and Mobix Labs common stock, with an intended closing timeline of approximately 75 days.

On September 29, 2025, Mobix Labs delivered another letter to our board of directors reiterating its interest in a business combination and submitting what it described as a definitive proposal to acquire all outstanding shares of the Company for $1.30 per share, consisting of a mix of cash and Mobix Labs common stock, and also separately requested our cooperation with respect to an anticipated registration statement on Form S-4.

On October 3, 2025, Mobix Labs delivered an updated letter superseding its prior proposal and proposing to acquire all outstanding shares of the Company for $1.30 per share in cash, stating that the proposal was not subject to financing contingencies and was based on our publicly reported share count as of June 30, 2025.

On October 6, 2025, we sent a letter to Mobix Labs acknowledging receipt of its revised proposal and requesting clarification regarding share count assumptions, treatment of the Company’s publicly disclosed warrants and equity-linked instruments, and financing sources. Also on October 6, 2025, Mobix Labs issued a press release publicly announcing its updated all-cash proposal and reiterating its preference for a cooperative process with the Company.

On October 30, 2025, we entered into a mutual confidentiality agreement with Mobix Labs in connection with our ongoing review of strategic alternatives. The confidentiality agreement contains customary terms, including mutual 12-month standstill and non-solicitation provisions. On November 3, 2025, Mobix Labs issued a press release publicly announcing its entry into a mutual confidentiality agreement with us.

On January 21, 2026, Mobix Labs issued a press release, and we filed a Current Report on Form 8-K disclosing that the Company and Mobix Labs continue to engage in discussions regarding a potential strategic transaction and are conducting customary, confidential diligence and that Mobix Labs delivered to the Company a non-binding indication of interest contemplating a potential all-stock transaction at a premium to the Company’s trading price, subject to further diligence, negotiation, and the execution of definitive documentation.

Our board of directors continues to evaluate the Company’s options to enhance stockholder value. Our board of directors and management team are committed to acting in the best interests of all stockholders. Consistent with its fiduciary duties and in consultation with the Company’s financial and legal advisors, our board of directors will continue to carefully review Mobix Labs’ proposal to determine the course of action that it believes is in the best interest of the Company and its stockholders. We do not intend to make further comments regarding potential transactions or provide any public updates regarding proposed or potential transactions, unless required by applicable law or a regulatory body. There can be no assurance that any transaction will be completed with Mobix Labs or any other third party.

ATM Offering

On August 30, 2024, we entered into an At The Market Offering Agreement (the “Sales Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”) with respect to an “at the market” offering program, under which we may, from time to time, in our sole discretion, issue and sell through Ladenburg, acting as agent or principal, shares of our 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. We have no obligation to sell any shares pursuant to the Sales Agreement and either we or Ladenburg may terminate the Sales Agreement in accordance with its terms. During the twelve months ended December 31, 2025 and 2024, we sold 3,713,939 and 251,621 shares, respectively, of common stock for net proceeds of approximately $4,351,100 and $336,000, respectively, pursuant to the Sales Agreement. During the three months ended March 31, 2026, we sold 2,371,943 shares of common stock for net proceeds of approximately $2,303,484 pursuant to the Sales Agreement. Subsequent to March 31, 2026, we have sold 2,104,742 shares of common stock for net proceeds of approximately $2,061,205 through May 12, 2026. We currently have no amounts registered for sale under the Sales Agreement. We intend to file a new prospectus supplement under our existing shelf registration statement on Form S-3 following the filing of this Quarterly Report on Form 10-Q to register additional shares of common stock for sale under the Sales Agreement. The amount available for sale under any such prospectus supplement will be subject to limitations under General Instruction I.B.6 of Form S-3, which limits the aggregate market value of securities that may be sold by us during any 12-month period, as well as market conditions and other factors.

Risks and Uncertainties

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

For additional information on risks that could impact our future results of operations, please refer to “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of these condensed consolidated financial statements requires us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis we make these estimates based on our historical experience and on assumptions that we consider reasonable under the circumstances. Actual results may differ from these estimates and reported results could differ under different assumptions or conditions. Our significant accounting policies and estimates are disclosed in Note 1 of the “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 1 of the “Notes to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2025. As of March 31, 2026, there have been no material changes to our significant accounting policies and estimates.

Results of Operations

Net Revenue

	Three Months Ended March 31,						Year-Over-Year Change
	2026			2025			2025 to 2026
	(dollar amounts in thousands)
Product	$	667		$	3,800		$	(3,133	)	(82	)%
Percentage of total net revenue		69	%		98	%

The following table details revenue by product category for the three months ended March 31, 2026 and 2025:

(amounts in thousands)	Three Months Ended March 31,				Year-Over-Year
Product category	2026		2025		Change
Memory ICs	$	20	$	2,267		(2,247	)
mmWave ICs		504		975		(471	)
mmWave modules		111		558		(447	)
mmWave other products		32		-		32
	$	667	$	3,800	$	(3,133	)

Product revenue decreased for the three months ended March 31, 2026 compared with the same period of 2025 primarily due to the decrease in sales of our memory IC products due to the significant decrease in EOL shipments and decreases in shipments of our mmWave ICs and antenna modules. The decline in mmWave product shipments during the three months ended March 31, 2026 also reflected the delayed shipment of a sizable order due to material availability constraints from one of our suppliers, as well as subdued near-term demand from existing fixed wireless access customers. The delayed order was shipped subsequent to March 31, 2026.

	Three Months Ended March 31,						Year-Over-Year Change
	2026			2025			2025 to 2026
	(dollar amounts in thousands)
Services and other	$	296		$	69		$	227	329	%
Percentage of total net revenue		31	%		2	%

Services and other revenue includes royalty, non-recurring engineering services and license revenues. The increase in services and other revenue for the three months ended March 31, 2026 compared with the same period of 2025 was primarily due to an increase in non-recurring engineering services revenue related to our mmWave technology, partially offset by a decrease in royalties from licensees of our memory technology due to reduced shipments by these licensees, which we attribute to the discontinuation of the foundry process by TSMC.

Cost of Net Revenue and Gross Profit

	Three Months Ended March 31,						Year-Over-Year Change
	2026			2025			2025 to 2026
	(dollar amounts in thousands)
Cost of net revenue	$	371		$	1,189		$	(818	)	(69	)%
Percentage of total net revenue		39	%		31	%

Cost of net revenue is primarily comprised of direct and indirect costs related to the sale of our products, including depreciation of production-related fixed assets.

Cost of net revenue decreased for the three months ended March 31, 2026 when compared with the same period in 2025, primarily related to the decrease in product revenue.

	Three Months Ended March 31,						Year-Over-Year Change
	2026			2025			2025 to 2026
	(dollar amounts in thousands)
Gross profit	$	592		$	2,680		$	(2,088	)	(78	)%
Percentage of total net revenue		61	%		69	%

Gross profit decreased for the three months ended March 31, 2026 compared with the same period of 2025, primarily due to the reduction in product revenues, partially offset by increased services and other revenues. During the three months ended March 31, 2026 and 2025, mmWave inventory with values of approximately $182,000 and $94,000, respectively, which was written down prior to January 1, 2026, was sold to customers.

Research and Development

	Three Months Ended March 31,						Year-Over-Year Change
	2026			2025			2025 to 2026
	(dollar amounts in thousands)
Research and development	$	1,590		$	1,583		$	7	0	%
Percentage of total net revenue		165	%		41	%

Our research and development, or R&D, expenses include costs related to the development of our products, including facility allocations. We expense R&D costs as they are incurred.

We expect that total R&D expenses will remain flat for the remainder of 2026 compared with the prior periods of 2025.

Selling, General and Administrative

	Three Months Ended March 31,						Year-Over-Year Change
	2026			2025			2025 to 2026
	(dollar amounts in thousands)
SG&A	$	1,486		$	1,611		$	(125	)	(8	)%
Percentage of total net revenue		154	%		42	%

Selling, general and administrative, or SG&A, expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, human resources and general management.

The decrease for the three months ended March 31, 2026 compared with the same period of 2025 was primarily attributable to reductions in expenses for facilities and stock based compensation. These decreases were partially offset by increases in consulting and professional services costs. We expect that total SG&A expense will remain flat or slightly decrease for the remainder of 2026 compared with 2025, as we continue to manage our SG&A expenses.

Liquidity and Capital Resources; Changes in Financial Condition

Cash Flows

As of March 31, 2026, we had cash and cash equivalents of $2.7 million and working capital of $4.0 million.

Net cash used in operating activities was $2.3 million for the first three months of 2026, which primarily resulted from our net loss of $2.5 million, as partially offset by non-cash charges of $0.1 million of depreciation and amortization and $0.1 million of stock based compensation.

Net cash used in operating activities was $1.0 million for the first three months of 2025, which primarily resulted from our net loss of $0.5 million, as adjusted for cash outflows of $0.7 million in net changes in assets and liabilities, and partially offset by non-cash charges of $0.1 million of depreciation and amortization and $0.1 million of stock based compensation. The changes in assets and liabilities primarily related to the timing of collections of receivables, purchases of inventory and other vendor payables and prepayments.

Net cash used in investing activities of approximately $0.2 million for the three months ended March 31, 2026 which was attributable to the purchase of fixed assets.

For the three months ended March 31, 2025 no cash was provided by or used in investing activities.

Net cash provided by financing activities of $2.3 million for the three months ended March 31, 2026 primarily comprised $2.3 million of net proceeds from sales of our common stock under the Sales Agreement.

Net cash provided by financing activities for the three months ended March 31, 2025 comprised $0.4 million of net proceeds from sales of our common stock under the Sales Agreement, partially offset by repayment of financing lease liabilities.

Our future liquidity and capital requirements are expected to vary from quarter-to-quarter, depending on numerous factors, including:

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level of revenue;

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cost, timing and success of technology development efforts;

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inventory levels, which may fluctuate based on supply chain conditions, customer demand patterns and the timing of supplier deliveries, and we maintain non-cancelable purchase orders with our suppliers, which exposes us to additional inventory risk if demand does not materialize as expected;

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timing of product shipments, which may be impacted by supply chain disruptions experienced by us or our customers;

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length of billing and collection cycles, which may be impacted in the event of a global recession or economic downturn;

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variations in manufacturing yields, material lead time and costs and other manufacturing risks;

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costs of acquiring other businesses and integrating the acquired operations; and

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profitability of our business.

Purchase Obligations

Our primary purchase obligations include non-cancelable purchase orders for inventory. At March 31, 2026, we had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $3.2 million.

Going Concern - Working Capital

We expect to continue to incur operating losses during 2026, as we do not expect to generate any meaningful revenue from shipments of our remaining memory products and as we continue to secure new customers for and continue to invest in the development of our mmWave products. Further, we expect our cash expenditures to continue to exceed receipts for at least the next 12 months, as our revenues will not be sufficient to offset our operating expenses. In addition, we have incurred and may continue to incur substantial costs related to our strategic alternative exploration process, which costs include the fees of our financial and legal advisors. We believe that our existing cash and cash equivalents as of March 31, 2026 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the fourth quarter of 2026.

We will need to increase revenues beyond the levels that we have 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 our expected operating losses and cash burn and recurring losses from operations, if we are unable to raise sufficient capital through additional debt or equity arrangements, there will be uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt as to our ability to continue as a going concern within one year from the date of issuance of our condensed consolidated financial statements. In addition, our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2025, expressed substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements presented in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared assuming that we will continue as a going concern, and do not include any adjustments that might result from the outcome of 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 us. We are currently selling shares of our common stock under the Sales Agreement and seeking additional financing in order to meet our cash requirements for the foreseeable future. If we are unsuccessful in these efforts, we will need to implement additional cost reduction strategies, which could further affect our near- and long-term business plan. These cost reduction strategies may include, but are not limited to, reducing headcount and curtailing business activities.

If we were to raise additional capital through sales of our equity securities, our stockholders would suffer dilution of their equity ownership. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, prohibit us from paying dividends, repurchasing our stock or making investments, and force us to maintain specified liquidity or other ratios, any of which could harm our business, operating results and financial condition. If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things:

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develop or enhance our products;

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continue to expand our product development and sales and marketing organizations;

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acquire complementary technologies, products or businesses;

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expand operations, in the United States or internationally;

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hire, train and retain employees; or

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respond to competitive pressures or unanticipated working capital requirements.

Our failure to do any of these things could seriously harm our ability to execute our business strategy and may force us to curtail our existing operations.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements or obligations that are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity or capital resources.

Indemnifications

In the ordinary course of business, we enter into contractual arrangements under which we may agree to indemnify the counter-party from losses relating to a breach of representations and warranties, a failure to perform certain covenants, or claims and losses arising from certain external events as outlined within the 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. We have also entered into indemnification agreements with our officers and directors. No material amounts related to these indemnifications are reflected in our condensed consolidated financial statements for the three months ended March 31, 2026.

Recent Accounting Pronouncements

See Note 1 to the condensed consolidated financial statements for a discussion of recently-issued accounting pronouncements.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based on this evaluation, our management concluded that, as of March 31, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting. During the quarter ended March 31, 2026, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. Legal Proceedings

The discussion of legal matters in Note 4 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q under the heading “Legal Matters” is incorporated by reference in response to this Part II, Item 1.

ITEM 1A. Risk Factors

We face many significant risks in our business, some of which are unknown to us and not presently foreseen. These risks could have a material adverse impact on our business, financial condition and results of operations in the future. Other than as set forth below, there have been no material changes with respect to the risk factors disclosed under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, which we filed with the SEC on March 30, 2026.

We might not be able to continue as a going concern.

Our condensed consolidated financial statements as of March 31, 2026 have been prepared under the assumption that we will continue as a going concern for the next twelve months. As of March 31, 2026, we had cash and cash equivalents of $2.7 million and an accumulated deficit of $184.4 million. We believe that our existing cash and cash equivalents as of March 31, 2026 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the fourth quarter of 2026.

Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to achieve sustainable revenues and profitable operations. We will need to increase revenues substantially beyond levels that we have 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 our expected operating losses and cash burn for the foreseeable future and recurring losses from operations, if we are unable to raise sufficient capital through additional debt or equity arrangements, there will be uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt as to our ability to continue as a going concern. In addition, our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2025, expressed substantial doubt about our ability to continue as a going concern. If we cannot continue as a viable entity, our stockholders would likely lose most or all of their investment in us.

If we are unable to generate sustainable operating profit and sufficient cash flows, then our future success will depend on our ability to raise capital. We cannot be certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to us or, if available, will be on terms acceptable to us. If we issue additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of our common stock, and our current stockholders may experience dilution. If we are unable to obtain funds when needed or on acceptable terms, we may be required to curtail our current product development programs, cut operating costs, forego future development and other opportunities or even terminate our operations.

Our forecast of the period of time through which our financial resources will be adequate to support our operating requirements is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this “Risk Factors” section and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. We have based this estimate on a number of assumptions that may prove to be wrong and changing circumstances beyond our control may cause us to consume capital more rapidly than we currently anticipate. Our inability to obtain additional funding when we need it could seriously harm our business.

We have a history of losses, and we will need to raise additional capital.

We incurred net losses of approximately $2.5 million for the three months ended March 31, 2026 and $4.8 million for the year ended December 31, 2025, and we had an accumulated deficit of approximately $184.4 million as of March 31, 2026. These and prior-year losses have resulted in significant negative cash flows. To remain competitive and expand our product offerings to customers, we will need to increase revenues substantially beyond levels that we have 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. Given our history of fluctuating revenues and operating losses, and the challenges we face in securing customers for our products, we cannot be certain that we will be able to achieve and maintain profitability on either a quarterly or annual basis in the future. As a result, we may need to raise additional capital in the future, which may or may not be available to us at all or only on unfavorable terms.

Our evaluation of strategic alternatives, including Mobix Labs’ proposal, may not lead to a favorable outcome and could create business disruption and stock price volatility.

On June 27, 2025, we confirmed in a public press release the receipt of an unsolicited non-binding acquisition proposal from Mobix Labs, which initial proposal was subsequently revised by Mobix Labs, most recently on October 3, 2025. On July 11, 2025, we announced that our Board has authorized the exploration of strategic alternatives, including a merger, sale of assets or other similar transaction, all intended to maximize stockholder value and further our business operations. This process is ongoing, and our Board has not set a definitive timetable for the completion of its evaluation. In connection with our ongoing strategic review process, the Board is evaluating Mobix Labs’ revised unsolicited non-binding proposal to acquire all of our outstanding shares for $1.30 per share in cash, which we received from Mobix Labs on October 3, 2025, and on October 30, 2025, we entered into a mutual confidentiality agreement with Mobix Labs, which contains customary terms, including mutual 12-month standstill and non-solicitation provisions.

The process of reviewing potential strategic alternatives has been and may continue to be a significant distraction for our Board and management, and has required and may continue to require the expenditure of significant time and resources by us, which may cause concern to our employees, investors, strategic partners, and other constituencies and may have a material impact on our business and operating results and/or result in increased volatility in our share price.

There can be no assurance that our strategic review process will result in any transaction or other strategic outcome. Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to third parties in a potential transaction with us on reasonable terms.

We do not intend to disclose further developments on this strategic review process unless and until we determine that such disclosure is appropriate or necessary. If we determine to engage in a transaction as a result of our exploration and evaluation of strategic alternatives, our future business, prospects, financial position and operating results could be significantly different than those in historical periods or projected by our management. Moreover, the review of strategic alternatives may disrupt our business by causing uncertainty among current and potential employees, suppliers, customers and investors, and could expose us to potential litigation. The selection and execution of a strategic alternative may lead to similar disruptions, and parties advocating for alternatives not selected may solicit support for such other alternatives, causing further disruption. Until the process is concluded, perceived uncertainties related to our future may result in the loss of potential business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and business partners. Further, any alternative strategic paths that may be pursued and completed ultimately may not deliver the anticipated benefits or enhance stockholder value.

The occurrence of any one or more of the above risks could have a material adverse impact on our business, financial condition, results of operations and cash flows.

If we are unable to satisfy the continued listing requirements of Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected.

Our common stock may lose value and could be delisted from Nasdaq due to several factors or a combination of such factors. While our common stock is currently listed on Nasdaq, we can give no assurance that we will be able to maintain compliance with the continued listing requirements of Nasdaq, including, but not limited to, the corporate governance requirements and the minimum closing bid price requirement or the minimum equity requirement. If we fail to maintain compliance with any such continued listing requirement, there can also be no assurance that we will be able to regain compliance with any such continued listing requirement in the future or that our common stock will not be delisted in the future.

If we were to be delisted, we would expect our common stock to be traded in the over-the-counter market which could adversely affect the liquidity of our common stock. Additionally, we could face significant material adverse consequences, including:

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a limited availability of market quotations for our common stock;

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a decreased ability to issue additional securities or obtain additional financing in the future;

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reduced liquidity for our stockholders;

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potential loss of confidence by customers, collaboration partners and employees; and

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loss of institutional investor interest.

In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.

We discontinued the production of our memory products.

Taiwan Semiconductor Manufacturing Corporation, or TSMC, the sole foundry that manufactured the wafers used to produce our memory IC products, discontinued the foundry process used to produce such wafers. As a result, we commenced an end-of-life (“EOL”) of our memory products in 2023. We expect revenues from sales of our memory IC products to be minimal during 2026. The discontinuation of the production and sale of our memory IC products will negatively impact our future revenues, results of operations and cash flows.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

There are no transactions that have not been previously included in a Current Report on Form 8-K.

ITEM 5. Other Information

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b-5 trading arrangement or a non-Rule 10b-5 trading arrangement during the fiscal quarter ended March 31, 2026, as such terms are defined under Item 408(a) of Regulation S-K.

ITEM 6. Exhibits

(a) Exhibits

Reference

Filed or

Exhibit No.

Exhibit Description

Form

File No.

Form Exhibit

Filing Date

Furnished Herewith

3.1

Restated Certificate of Incorporation of the Company

8-K

000-32929

3.6

November 12, 2010

3.1.1

Certificate of Amendment to Restated Certification of Incorporation of the Company

8-K

000-32929

3.1

February 14, 2017

3.1.2

Certificate of Amendment to the Amended and Restated Certification of Incorporation of the Company, filed with the Secretary of State of the State of Delaware on August 27, 2019

8-K

000-32929

3.1

August 27, 2019

3.1.3

Certificate of Amendment to Articles of Incorporation (Name Change)

8-K

000-32929

3.1

December 20, 2021

3.1.4

Certificate of Designation of Series A Special Voting Preferred Stock

8-K

000-32929

3.2

December 20, 2021

3.1.5

Certificate of Amendment to Amended and Restated Certification of Incorporation of the Company, filed with the Secretary of State of the State of Delaware on December 15, 2023

8-K

000-32929

3.1

December 19, 2023

3.2

Amended and Restated Bylaws of the Company

8-K

000-32929

3.1

November 23, 2021

31.1

Rule 13a-14 Certification

31.2

Rule 13a-14 Certification

32.1

Section 1350 Certification

101

The following financial information from Peraso Inc.’s quarterly report on Form 10-Q for the period ended March 31, 2026, filed with the SEC on May 14, 2026, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025, (ii) the Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, (iii) the Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025, and (v) Notes to Condensed Consolidated Financial Statements

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: May 14, 2026	PERASO INC.

	By:	/s/ Ronald Glibbery
		Ronald Glibbery
		Chief Executive Officer (Principal Executive Officer)

	By:	/s/ James Sullivan
		James Sullivan
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Peraso Inc.