UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended September 30, 2025

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

For the transition period from to

Commission file number 000-32929

PERASO INC.

(Exact name of registrant as specified in its charter)

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

2033 Gateway Place, Suite 500

San Jose, California 95110

(Address of principal executive office and zip code)

(408) 418-7500

(Registrant’s telephone number, including area code)

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

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

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

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

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

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

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

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

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

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

PERASO INC.

FORM 10-Q

For the Quarterly Period Ended September 30, 2025

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited):	1

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

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

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

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

	Notes to Condensed Consolidated Financial Statements	5

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

Item 4.	Controls and Procedures	29

PART II — OTHER INFORMATION		30

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

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

Item 5.	Other Information	33

Item 6.	Exhibits	34

	Signatures	35

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PERASO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

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

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

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

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

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

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

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

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

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

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

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

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

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

PERASO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. The Company and Summary of Significant Accounting Policies

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

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

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

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

Liquidity and Going Concern

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

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

Basis of Presentation

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

Reverse Stock Split

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

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

Risks and Uncertainties

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

Use of Estimates

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

Cash Equivalents and Investments

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

Fair Value Measurements

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

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

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

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

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

Derivatives and Liability-Classified Instruments

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

Allowance for Doubtful Accounts

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

Inventories

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

Intangible and Long-lived Assets

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

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

Revenue Recognition

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

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

Product revenue

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

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

Royalty and other revenue

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

Engineering services revenue

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

Contract liabilities – deferred revenue

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

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

See Note 6 for disaggregation of revenue by geography.

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

Cost of Net Revenue

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

Stock-Based Compensation

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

Foreign Currency Transactions

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

Per-Share Amounts

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

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

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

Recently Issued Accounting Pronouncements

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

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

Note 2. Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

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

Note 3. Balance Sheet Detail

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

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

Note 4. Severance and Software License Obligations

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

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

Note 5. Commitments and Contingencies

Leases

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

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

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

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

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

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

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

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

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

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

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

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

Indemnification

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

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

Product Warranties

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

Legal Matters

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

Purchase Obligations

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

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

Segment Information

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

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

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

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

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

Concentrations

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

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

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

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

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

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

*	Represents less than 10%

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

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

*	Represents less than 10%

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

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

*	Represents less than 10%

Note 7. Stock-Based Compensation

Common Stock Equity Plans

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

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

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

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

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

Stock-Based Compensation Expense

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

Valuation Assumptions and Expense Information for Stock-Based Compensation

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

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

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

Common Stock Options and Restricted Stock

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

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

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

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

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

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

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

Note 8. Stockholders’ Equity

February 2024 Public Offering

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

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

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

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

Shares Issued for Services

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

ATM Offering

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

Note 9. Warrants

2024 Warrant Inducement Offering

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

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

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

Amendments to Series C Warrants

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

2025 Warrant Inducement Offering

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

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

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

Warrants Classified as Liabilities

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

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

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

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

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

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

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

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

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

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

Warrants Classified as Equity

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

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

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

Note 10. Related Party Transactions

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

Note 11. Memory IC Product End-of-Life

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

Note 12. Subsequent Events

Issuance of Common Stock under ATM Offering Program

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

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

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

Overview

Our strategy and primary business objective is to be a profitable, IP-rich fabless semiconductor company offering integrated circuits, or ICs, antenna modules and related non-recurring engineering services. We specialize in the development of mmWave semiconductors, primarily in the unlicensed 60 GHz spectrum band for 802.11ad/ay-compliant devices and in the 28/39 GHz spectrum bands for 5G-compliant devices. We derive our revenue from selling semiconductor devices, as well as antenna modules based on using those mmWave semiconductor devices. We have pioneered a high-volume mmWave IC production test methodology using standard, low-cost production test equipment. It has taken us several years to refine performance of this production test methodology, and we believe this places us in a leadership position in addressing the operational challenges of delivering mmWave products into high-volume markets. We also produce and sell complete mmWave antenna modules. The primary advantage provided by our antenna modules is that our proprietary mmWave ICs and the antenna are integrated into a single device. A differentiating characteristic of mmWave technology is that the RF amplifiers must be as close as possible to the antenna to minimize loss. With our module, we can guarantee the performance of the amplifier/antenna interface and simplify customers’ radio frequency, or 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. Since March 2025, we received additional purchase orders totaling approximately $452,800 from customers for remaining inventory. We recorded approximately $72,000 of product revenue from these purchase orders during the three months ended September 30, 2025.

We incurred net losses of approximately $3.5 million for the nine months ended September 30, 2025 and $10.7 million for the year ended December 31, 2024, and we had an accumulated deficit of approximately $180.6 million as of September 30, 2025. These and prior year losses have resulted in significant negative cash flows and 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.

Our board of directors is evaluating 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 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 at this price or at any other price with such third party or any other third party.

2025 Warrant Inducement Offering

On September 11, 2025, we entered into an inducement offer letter agreement (the “2025 Inducement Letter”) with a holder (the “Series C Holder”) of Series C Warrants to purchase up to an aggregate of 952,380 shares of common stock, having an original exercise price of $1.61 per share, issued to the Series C Holder on November 6, 2024. Pursuant to the 2025 Inducement Letter, the Series C Holder agreed to exercise for cash its Series C Warrants at a reduced exercise price of $1.18 per share in consideration for our agreement to issue in a private placement new Series E common stock purchase warrants (the “Series E Warrants”) to purchase an aggregate of 952,380 shares of common stock. The Series E Warrants have an exercise price of $1.25 per share, will be exercisable upon the six-month anniversary of the date of issuance and will have a term of exercise of 5.5 years from the initial exercise date. The warrant inducement offering closed on September 12, 2025, and resulted in net proceeds to us of approximately $0.9 million, after deducting placement agent fees and other offering expenses payable by us.

Compliance with Nasdaq Minimum Bid Price Requirement

On September 5, 2025, we received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the 30 consecutive business days ending on September 4, 2025, we no longer met the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2). On September 19, 2025, we received a notification letter from Nasdaq notifying us that we had regained compliance with the minimum bid price requirement.

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, 2024. As of September 30, 2025, there have been no material changes to our significant accounting policies and estimates.

Results of Operations

Net Revenue

	September 30,						Change
	2025			2024			2024 to 2025
	(dollar amounts in thousands)
Product - three months ended	$	3,062		$	3,811		$	(749	)	(20	)%
Percentage of total net revenue		95	%		99	%
Product - nine months ended	$	9,080		$	10,596		$	(1,516	)	(14	)%
Percentage of total net revenue		97	%		97	%

The following table details revenue by product category for the three and nine months ended September 30, 2025 and 2024:

(amounts in thousands)	For the Three Months Ended September 30,
Product category	2025		2024		change
Memory ICs	$	72	$	3,677	$	(3,605	)
mmWave ICs		2,276		67		2,209
mmWave modules		658		60		598
mmWave other products		56		7		49
	$	3,062	$	3,811	$	(749	)

(amounts in thousands)	For the Nine Months Ended September 30,
Product category	2025		2024		change
Memory ICs	$	2,339	$	9,487	$	(7,148	)
mmWave ICs		4,569		272		4,297
mmWave modules		2,102		817		1,285
mmWave other products		70		20		50
	$	9,080	$	10,596	$	(1,516	)

Product revenue decreased for the three and nine months ended September 30, 2025 compared with the same periods of 2024 primarily due to the decrease in our memory IC product shipments attributable to the significant reduction in EOL shipments subsequent to March 2025. The decreases were partially offset by an increase in shipments of our mmWave ICs and antenna modules.

	September 30,						Change
	2025			2024			2024 to 2025
	(dollar amounts in thousands)
Royalty and other - three months ended	$	172		$	30		$	142		473	%
Percentage of total net revenue		—			1	%
Royalty and other - nine months ended	$	243		$	299		$	(56	)	-19	%
Percentage of total net revenue		3	%		3	%

Royalty and other revenue includes royalty, non-recurring engineering services and license revenues. The increase in royalty and other revenue for the three months ended September 30, 2025 compared with the same period of 2024 was primarily due to an increase in non-recurring engineering services revenue related to our mmWave technology attributable to a statement of work entered into in July 2025. The decrease in royalty and other revenue for the nine months ended September 30, 2025 compared with the same period of 2024 was primarily due to a decrease in royalty revenues 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

	September 30,						Change
	2025			2024			2024 to 2025
	(dollar amounts in thousands)
Cost of net revenue -three months ended	$	1,417		$	2,034		$	(617	)	-30	%
Percentage of total net revenue		44	%		53	%
Cost of net revenue -nine months ended	$	3,753		$	5,431		$	(1,678	)	-31	%
Percentage of total net revenue		40	%		50	%

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 and, prior to January 1, 2025, amortization of intangible assets.

Cost of net revenue decreased for the three months ended September 30, 2025 when compared with the same period in 2024, primarily related to the decrease in product revenue and amortization of developed technology intangible assets of approximately $0.6 million, as these assets were fully amortized as of December 31, 2024. Cost of net revenue decreased for the nine months ended September 30, 2025 when compared with the same period in 2024, primarily related to the decrease in product revenue and amortization of developed technology intangible assets of approximately $1.7 million, as these assets were fully amortized as of December 31, 2024.

	September 30,						Change
	2025			2024			2024 to 2025
	(dollar amounts in thousands)
Gross profit -three months ended	$	1,817		$	1,807		$	10	1	%
Percentage of total net revenue		56	%		47	%
Gross profit -nine months ended	$	5,570		$	5,464		$	106	2	%
Percentage of total net revenue		60	%		50	%

Gross profit remained flat for the three months ended September 30, 2025 compared with the same period of 2024, despite the decrease in total net revenue, primarily due to product revenue mix, increased contribution from royalty and other revenues and sales of mmWave inventory with a cost of approximately $0.3 million that had been written down in prior periods.

Gross profit remained relatively flat for the nine months ended September 30, 2025 compared with the same period of 2024, despite the decrease in total net revenue, primarily due to product revenue mix and sales of mmWave inventory with a cost of approximately $0.6 million that had been written down in prior periods.

Research and Development

	September 30,						Change
	2025			2024			2024 to 2025
	(dollar amounts in thousands)
Research and development -three months ended	$	1,528		$	2,158		$	(630	)	(29	)%
Percentage of total net revenue		47	%		56	%
Research and development -nine months ended	$	4,773		$	7,615		$	(2,842	)	(37	)%
Percentage of total net revenue		51	%		70	%

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

The decrease for the three and nine months ended September 30, 2025 compared with the same periods of 2024 was primarily due to: i) reduced salary and consulting costs, as we implemented reductions in force during 2024 and terminated consultant contracts, ii) reduced rent expense, as our San Jose office lease expired in January 2025, and iii) reduced software license expense, as during the three and nine months ended September 30, 2024, we accrued the value of certain of our software license obligations (see Note 4 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q).

We expect that total R&D expenses will decrease during the remainder of 2025 compared with the prior period of 2024, as a result of our cost reduction initiatives.

Selling, General and Administrative

	September 30,						Change
	2025			2024			2024 to 2025
	(dollar amounts in thousands)
SG&A -three months ended	$	1,479		$	2,349		$	(870	)	(37	)%
Percentage of total net revenue		46	%		61	%
SG&A -nine months ended	$	4,501		$	6,592		$	(2,091	)	(32	)%
Percentage of total net revenue		48	%		61	%

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 and amortization of certain intangible assets.

The decrease for the three months ended September 30, 2025 compared with the same period of 2024 was primarily attributable to reductions in expenses for facilities, stock based compensation and amortization of purchased intangible assets for customer relationships of approximately $0.3 million, which were fully amortized as of December 31, 2024. The decrease for the nine months ended September 30, 2025 compared with the same period of 2024 was primarily attributable to reductions in expenses for facilities, stock based compensation and amortization of purchased intangible assets for customer relationships of approximately $0.8 million, which were fully amortized as of December 31, 2024. 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 2025 compared with 2024, as we continue to manage our SG&A costs.

Severance and Software License Obligations

	September 30,						Change
	2025			2024			2024 to 2025
	(dollar amounts in thousands)
Severance and software license obligations -three months ended	$	—		$	—		$	—		0	%
Percentage of total net revenue		0	%		0	%
Severance and software license obligations -nine months ended	$	(223	)	$	2,063		$	(2,286	)	(111	)%
Percentage of total net revenue		(2	)%		19	%

In November 2023, we implemented an employee lay-off and terminated certain consulting positions (the “Reductions”) to reduce operating expenses and cash burn, as we prioritized business activities and projects that we believe will have a higher return on investment. As part of the Reductions, we implemented a temporary lay-off that impacted 16 employees (the “Employees”) of Peraso Tech. During the six months ended June 30, 2024, we determined that we would not recall any of the 11 Employees that remained on our payroll and commenced notifying the remaining Employees that their employment would be terminated. As a result, we recorded severance charges of approximately $0.4 million for each of the three and six months ended June 30, 2024. The severance liabilities were fully paid as of September 30, 2025.

As a result of the decision to not recall the Employees, we determined that it was probable that a number of our non-cancelable licenses for computer-aided design software would not be utilized during the remaining license terms. During the three months ended June 30, 2024, we expensed the value of the remaining contractual liabilities and recorded liabilities of approximately $1.6 million. During the three months ended June 30, 2025, a licensor terminated one of the license agreements and initiated a refund of approximately $56,300 for amounts previously paid by us. As a result, we reversed approximately $222,600 of expense and approximately $166,300 of the related contractual liabilities for this licensor during the three months ended June 30, 2025. As of September 30, 2025, the remaining contractual liabilities of approximately $0.2 million were recorded in accounts payable and are expected to be paid by December 31, 2025.

Liquidity and Capital Resources; Changes in Financial Condition

Cash Flows

As of September 30, 2025, we had cash and cash equivalents of $1.9 million and working capital of $3.1 million.

Net cash used in operating activities was $4.6 million for the first nine months of 2025, which primarily resulted from our net loss of $3.5 million, as increased by $1.7 million in net changes in assets and liabilities, and partially offset by non-cash charges of $0.2 million of depreciation and amortization and $0.4 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 operating activities was $3.9 million for the first nine months of 2024, which primarily resulted from our net loss of $9.2 million, as adjusted for a $1.6 million non-cash gain on the change in fair value of warrant liability, and partially offset by non-cash charges of $3.0 million of depreciation and amortization, $3.3 million of stock based compensation and $0.6 million in net changes in assets and liabilities. The changes in assets and liabilities primarily related to the timing of accruals for software licenses, accrued severance benefits and accounts receivable collections, and other vendor payables and prepayments.

Net cash used in investing activities was approximately $79,000 for the first nine months of 2025, which was attributable to the purchase of fixed assets.

For the nine months ended September 30, 2024, no cash was provided by or used in investing activities.

Net cash provided by financing activities of $3.2 million for the nine months ended September 30, 2025 primarily comprised $2.3 million of net proceeds from at-the-market sales of stock and $0.9 million in net proceeds from a warrant inducement offering completed in September 2025.

Net cash provided by financing activities of $3.6 million for the nine months ended September 30, 2024 primarily comprised $3.4 million in net proceeds from a public offering of our common stock and common stock purchase warrants completed in February 2024 and a $0.1 million sale of unregistered stock to a member of our board of directors, $0.2 million of net proceeds from at-the-market sales of stock, which was partially offset by $0.1 million for repayment of finance lease liabilities.

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

●

level of revenue;

●

cost, timing and success of technology development efforts;

●

inventory levels, as supply chain disruption during the COVID-19 pandemic required us to maintain higher inventory levels and place purchase orders with our suppliers longer into the future, which exposes us to additional inventory risk;

●

timing of product shipments, which may be impacted by supply chain disruptions;

●

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

●

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

●

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

●

profitability of our business.

Purchase Obligations

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

Going Concern - Working Capital

We expect to continue to incur operating losses during 2025, as we do not expect any further shipments or to generate any meaningful revenue from shipments of our memory products after March 2025, with the exception of two purchase orders received in September 2025, 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, including our evaluation of Mobix Labs’ proposal, which costs include the fees of our financial and legal advisors. We believe that our existing cash and cash equivalents as of September 30, 2025 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the first 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, the Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2024, expressed substantial doubt about the Company’s ability to continue as a going concern. 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 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.

As further discussed in Note 9 to the condensed consolidated financial statements, we completed warrant inducement offerings in September 2025 and November 2024 for net proceeds of approximately $0.9 million and $2.6 million, respectively. Additionally, as further discussed in Note 8 to the condensed consolidated financial statements, on August 30, 2024, we entered into the Sales Agreement with Ladenburg, pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock through Ladenburg as agent and/or principal (subject to the limitations of General Instruction I.B.6 of Form S-3) through an at-the-market program. During the three and nine months ended September 30, 2025, we sold 733,049 and 2,003,207 shares of common stock for proceeds of approximately $751,200 and $2,270,200 (net of commissions of approximately $23,000 and $70,000 paid to Ladenburg), respectively, pursuant to the Sales Agreement. On October 10, 2025, we increased the maximum aggregate offering amount of common stock issuable pursuant to the Sales Agreement to $1,750,000. Further, during 2023 and 2024, we implemented reductions in our workforce and eliminated 19 full-time equivalent positions. These cost reduction actions were intended to preserve cash, as we kept capital expenditures to minimum levels in order to reduce operating costs and our short-term cash needs.

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:

●

develop or enhance our products;

●

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

●

acquire complementary technologies, products or businesses;

●

expand operations, in the United States or internationally;

●

hire, train and retain employees; or

●

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 and nine months ended September 30, 2025.

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 September 30, 2025, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting. During the quarter ended September 30, 2025, 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 5 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, 2024, which we filed with the SEC on March 28, 2025.

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

Our consolidated financial statements as of September 30, 2025 have been prepared under the assumption that we will continue as a going concern for the next twelve months. As of September 30, 2025, we had cash and cash equivalents of $1.9 million and an accumulated deficit of $180.6 million. We believe that our existing cash and cash equivalents as of September 30, 2025 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the first 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, 2024, 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, 2024. 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.

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:

●

a limited availability of market quotations for our common stock;

●

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

●

reduced liquidity for our stockholders;

●

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

●

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. In March 2025, we fulfilled all outstanding EOL orders for our memory IC products. We do not expect any further shipments or to generate any meaningful revenue from shipments of our memory IC products after March 2025 with the exception of two purchase orders received in September 2025. For the nine months ended September 30, 2025 and 2024, our memory IC products represented approximately 25% and 87% of our revenues, respectively. The discontinuation of the production and sale of our memory IC products will negatively impact our future revenues, results of operations and cash flows.

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

We incurred net losses of approximately $3.5 million for the nine months ended September 30, 2025 and $10.7 million for the year ended December 31, 2024, and we had an accumulated deficit of approximately $180.6 million as of September 30, 2025. These and prior-year losses have resulted in significant negative cash flows. 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 reduction in force undertaken to significantly reduce our ongoing operating expenses may not result in our intended outcomes and may yield unintended consequences and additional costs.

In November 2023, we implemented an employee lay-off and terminated certain consulting positions (the “Reductions”) to reduce operating expenses and cash burn, as we prioritized business activities and projects that we believe will have a higher return on investment. As part of the Reductions, we implemented a temporary lay-off that impacted 16 employees (the “Employees”) of Peraso Tech. During the six months ended June 30, 2024, we determined that we would not recall any of the 11 Employees that remained on our payroll and commenced notifying the remaining Employees that their employment would be terminated. The remaining severance liabilities as of June 30, 2025 were paid in July 2025.

As a result of the decision to not recall the Employees, we determined that it was probable that a number of our non-cancelable licenses for computer-aided design software would not be utilized during the remaining license terms. During the six months ended June 30, 2024, we expensed the value of the remaining contractual liabilities and recorded liabilities of approximately $1.6 million. During the three months ended June 30, 2025, a licensor terminated one of the license agreements and initiated a refund of approximately $56,300 for amounts previously paid by us. As a result, we reversed approximately $222,600 of expense and approximately $166,300 of the related contractual liabilities for this licensor during the three months ended June 30, 2025. As of September 30, 2025, the remaining contractual liabilities of approximately $0.2 million are expected to be paid by December 31, 2025.

In addition to the costs associated with the non-cancelable license commitments for computer-aided design software, the Reductions may result in other unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the Reductions. In addition, while positions have been eliminated certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees. We may also be unsuccessful in negotiating any desired strategic alternative or partnership relating to such functions on a timely basis, on acceptable terms, or at all. The Reductions could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives. Further, inflationary pressure may increase our costs, including employee compensation costs, or result in employee attrition to the extent our compensation does not keep up with inflation, particularly if our competitors’ compensation does. If we are unable to realize the anticipated benefits from the Reductions, if we experience significant adverse consequences from the reduction in force, or if we are otherwise unable to retain our employees, our business, financial condition, and results of operations may be materially adversely affected.

International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our business, results of operations and financial condition.

Due to the interconnectedness of the global economy, policy changes in one area of the world can have an immediate and material adverse impact on markets around the world. Changes in international trade policies, including: (i) changes to existing trade agreements; (ii) greater restrictions on free trade generally; and (iii) significant increases in customs duties and tariffs on goods imported into the United States and reciprocal actions by other countries, could adversely affect our business, results of operations and financial condition.

Current or future tariffs or other restrictive trade measures may raise the costs of raw materials, components or finished goods, which may adversely impact both our product offerings and our operational expenses. Such cost increases may reduce our margins and require us to increase prices, which could harm our competitive position, reduce customer demand and damage customer relationships.

Trade disputes, trade restrictions, tariffs and other political tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also negatively impact customer demand for our products or services, delay purchases or renewals, limit expansion opportunities with customers, limit our access to capital, or otherwise negatively impact our business and operations. Ongoing tariff, trade restrictions and macroeconomic uncertainty has and may continue to contribute to volatility in the price of our common stock.

Ongoing uncertainty regarding trade policies may also complicate our short- and long-term strategic planning, and that of our partners and customers, including decisions regarding hiring, product strategy, capital investment, supply chain design and geographic expansion.

While we continue to monitor trade developments, the ultimate impact of these risks remains uncertain and any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our supply chain, as well as our business, results of operations and financial condition. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described 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, 2024.

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 September 30, 2025, as such terms are defined under Item 408(a) of Regulation S-K.

ITEM 6. Exhibits

(a) Exhibits

		Reference
Exhibit No.	Exhibit Description	Form	File No.	Form Exhibit	Filing Date	Filed or 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
4.1	Form of Series E Warrant	8-K	000-32929	4.1	September 12, 2025
4.2	Form of Placement Agent Warrant dated September 12, 2025	8-K	000-32929	4.2	September 12, 2025
10.1	Form of Amendment No. 2 to Series C Common Stock Purchase Warrant	8-K	000-32929	10.1	August 5, 2025
10.2	Form of Inducement Letter dated September 11, 2025	8-K	000-32929	10.1	September 12, 2025
31.1	Rule 13a-14 Certification					X
31.2	Rule 13a-14 Certification					X
32.1	Section 1350 Certification					X
101	The following financial information from Peraso Inc.’s quarterly report on Form 10-Q for the period ended September 30, 2025, filed with the SEC on November 12, 2025, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024, (ii) the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, (iii) the Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024, and (v) Notes to Condensed Consolidated Financial Statements					X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)					X

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: November 12, 2025	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)

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