prso-20260630

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 June 30, 2026

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

For the transition period from to

Commission file number 000-32929

PERASO INC.

(Exact name of registrant as specified in its charter)

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

2033 Gateway Place, Suite 500

San Jose, California 95110

(Address of principal executive office and zip code)

(408) 418-7500

(Registrant’s telephone number, including area code)

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

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

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

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

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

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

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

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

The number of outstanding shares of the registrant’s exchangeable shares, no par value, was 55,986 as of August 7, 2026.

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 15,064,476 as of August 7, 2026.

PERASO INC.

FORM 10-Q

For the Quarterly Period Ended June 30, 2026

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited):	1

	Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	1

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025	2

	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025	3

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 4.	Controls and Procedures	31

PART II — OTHER INFORMATION		32

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

	Signatures	37

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PERASO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

	June 30,			December 31,
	2026			2025
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,322		$	2,886
Accounts receivable, net		306			1,219
Inventories, net		1,708			1,168
Prepaid expenses and other		407			195
Total current assets		5,743			5,468

Property and equipment, net		548			363
Right-of-use lease assets		105			143
Other		390			105
Total assets	$	6,786		$	6,079
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	757		$	679
Accrued expenses and other		883			540
Deferred revenue		74			8
Short-term lease liabilities		96			95
Total current liabilities		1,810			1,322

Long-term lease liabilities		32			97
Warrant liabilities		19			24
Total liabilities		1,861			1,443
Commitments and contingencies (Note 4)
Stockholders’ equity
Preferred stock, $0.01 par value; 20,000 shares authorized; none issued and outstanding		—			—
Series A, special voting preferred stock, $0.01 par value; one share authorized, issued and outstanding at June 30, 2026 and December 31, 2025		—			—
Common stock, $0.001 par value; 120,000 shares authorized; 15,041 and 10,055 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively		14			9
Exchangeable shares, no par value; unlimited shares authorized; 56 shares outstanding at June 30, 2026 and December 31, 2025		—			—
Issuable shares, none and 137 shares at June 30, 2026 and December 31, 2025, respectively		—			162
Additional paid-in capital		191,501			186,338
Accumulated deficit		(186,590	)		(181,873	)
Total stockholders’ equity		4,925			4,636
Total liabilities and stockholders’ equity	$	6,786		$	6,079

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

`	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
Net revenue
Product	$	1,244		$	2,218		$	1,911		$	6,018
Services and other		63			2			359			71
Total net revenue		1,307			2,220			2,270			6,089
Cost of net revenue		474			1,147			845			2,336
Gross profit		833			1,073			1,425			3,753
Operating expenses
Research and development		1,625			1,662			3,210			3,245
Selling, general and administrative		1,444			1,411			2,935			3,022
Software license obligations		—			(223	)		—			(223	)
Total operating expenses		3,069			2,850			6,145			6,044
Loss from operations		(2,236	)		(1,777	)		(4,720	)		(2,291	)
Change in fair value of warrant liabilities		14			(29	)		5			6
Other income (expense), net		2			(23	)		(2	)		(15	)
Net loss	$	(2,220	)	$	(1,829	)	$	(4,717	)	$	(2,300	)

Net loss per share
Basic and diluted	$	(0.16	)	$	(0.31	)	$	(0.37	)	$	(0.39	)

Shares used in computing net loss per share
Basic and diluted		14,058			5,977			12,842			5,862

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

															Additional
	Common Stock				Issuable Shares						Exchangeable Shares				Paid-In		Accumulated
	Shares		Amount		Shares			Amount			Shares		Amount		Capital		Deficit			Total
Balance as of December 31, 2025		10,055	$	9		137		$	162			56	$	—	$	186,338	$	(181,873	)	$	4,636
At-the market sales of stock, net		2,372		2		—			—			—		—		2,302		—			2,304
Issuance of common stock under stock plans		18		—		—			—			—		—		14		—			14
Issuance of abeyance shares		137		—		(137	)		(162	)		—		—		162		—			—
Stock-based compensation		—		—		—			—			—		—		147		—			147
Net loss		—		—		—			—			—		—		—		(2,497	)		(2,497	)
Balance as of March 31, 2026		12,582		11		—			—			56		—		188,963		(184,370	)		4,604
At-the market sales of stock, net		2,450		3		—			—			—		—		2,361		—			2,364
Issuance of common stock under stock plan, net		9		—		—			—			—		—		7		—			7
Stock-based compensation		—		—		—			—			—		—		170		—			170
Net loss		—		—		—			—			—		—		—		(2,220	)		(2,220	)
Balance as of June 30, 2026		15,041	$	14		—		$	—			56	$	—	$	191,501	$	(186,590	)	$	4,925

																Additional
	Common Stock				Issuable Shares						Exchangeable Shares					Paid-In		Accumulated
	Shares		Amount		Shares			Amount			Shares			Amount		Capital		Deficit			Total
Balance as of December 31, 2024		4,474	$	3		917		$	1,193			60		$	—	$	179,390	$	(177,120	)	$	3,466
At-the market sales of stock, net		329		1		—			—			—			—		432		—			433
Shares issued for services		40		—		—			—			—			—		40		—			40
Stock-based compensation		—		—		—			—			—			—		125		—			125
Net loss		—		—		—			—			—			—		—		(471	)		(471	)
Balance as of March 31, 2025		4,843		4		917			1,193			60			—		179,987		(177,591	)		3,593
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

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

PERASO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2026			2025
Cash flows from operating activities:
Net loss	$	(4,717	)	$	(2,300	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		99			129
Stock-based compensation		317			266
Change in fair value of warrant liabilities		(5	)		(6	)
Inventory write-down		33			—
Shares issued for services		—			40
Other		(8	)		(13	)
Changes in assets and liabilities
Accounts receivable		920			(310	)
Inventories		(573	)		783
Prepaid expenses and other		(209	)		(526	)
Accounts payable		78			242
Right-of-use assets		38			73
Lease liabilities - operating		(65	)		(43	)
Deferred revenue, accrued expenses and other		169			(1,342	)
Net cash used in operating activities		(3,923	)		(3,007	)
Cash flows from investing activities:
Purchases of property and equipment		(280	)		(45	)
Net cash used in investing activities		(280	)		(45	)
Cash flows from financing activities:
Proceeds from at-the-market sales of stock, net		4,668			1,512
Payment of deferred equity facility costs		(50	)		—
Proceeds from option exercises		21			4
Repayment of financing leases		—			(47	)
Net cash provided by financing activities		4,639			1,469
Net increase (decrease) in cash and cash equivalents		436			(1,583	)
Cash and cash equivalents at beginning of period		2,886			3,344
Cash and cash equivalents at end of period	$	3,322		$	1,761

Supplemental disclosure:
Noncash investing and financing activities:
Recognition of deferred equity facility costs	$	240		$	—

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

PERASO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. The Company and Summary of Significant Accounting Policies

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

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

The accompanying condensed consolidated financial statements of the Company have been prepared without audit. The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements at that date. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission (the “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 six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other future period.

Liquidity and Going Concern

The Company incurred net losses of approximately $4.7 million for the six months ended June 30, 2026 and $4.8 million for the year ended December 31, 2025 and had an accumulated deficit of approximately $186.6 million as of June 30, 2026. These and prior year losses have resulted in significant negative cash flows and have required the Company to raise substantial amounts of additional capital. To date, the Company has primarily financed its operations through offerings of its common stock and warrants and the issuance of convertible notes and loans to investors and affiliates.

The Company expects to continue to incur operating losses for the foreseeable future as it secures additional customers and continues to invest in the commercialization of its products. The Company will need to increase revenues substantially beyond levels that it has attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business without raising additional capital from time to time. As a result of the Company’s expected operating losses and cash burn for the foreseeable future, as well as recurring losses from operations, management has concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern for a period of at least 12 months beyond the filing of this Quarterly Report on Form 10-Q. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2025, expressed substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments that might result from this uncertainty. There can be no assurance that the Company can raise additional capital, whether in the form of debt or equity financing, that will be sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company. The Company’s primary focus is producing and selling its products. If the Company is unsuccessful in these efforts, it will need to implement additional cost reduction strategies, which could further affect its near- and long-term business plan. These efforts may include, but are not limited to, reducing headcount and curtailing business activities.

Basis of Presentation

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

Risks and Uncertainties

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

Use of Estimates

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

Cash Equivalents and Investments

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

Fair Value Measurements

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

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

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

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

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

Derivatives and Liability-Classified Instruments

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

Allowance for Credit Losses

The Company establishes an allowance for credit losses to ensure that its trade receivables balances are not overstated due to uncollectibility. The Company performs ongoing customer credit evaluations within the context of the industry in which it operates and generally does not require collateral from its customers. A specific allowance of up to 100% of the invoice value is provided for any problematic customer balances. Delinquent account balances are written off after management has determined that the likelihood of collection is remote. The Company grants credit only to customers deemed creditworthy in the judgment of management. The allowance for credit losses was not material as of June 30, 2026 and December 31, 2025.

Inventories

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

Intangible and Long-lived Assets

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

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

Deferred Equity Facility Costs

Deferred equity facility costs are commitment, set-up, or legal fees paid to establish the committed equity facility. The costs are typically deferred and capitalized as a non-current asset. These costs are charged against equity proceeds as an issuance cost upon future drawdowns during the term of the facility agreement. When a drawdown occurs, a percentage of the non-current assets will be offset against the proceeds in the equity account. The percentage applied to offset the capitalized costs is calculated by dividing the total value of the drawdown by the total value of the committed equity facility. The asset will be evaluated for impairment at each balance sheet date.

Revenue Recognition

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

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

Product revenue

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

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

Engineering services revenue

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

Services and other revenue

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

Contract liabilities – deferred revenue

The Company’s contract liabilities consist of advance customer payments and deferred revenue. The Company classifies advance customer payments and deferred revenue as current or non-current based on the timing of when the Company expects to recognize revenue. As of June 30, 2026 and December 31, 2025, contract liabilities were in a current position and included in deferred revenue.

During the six months ended June 30, 2026, the Company recognized an immaterial amount of revenue that had been included in deferred revenue as of December 31, 2025.

See Note 5 for disaggregation of revenue by geography.

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

Cost of Net Revenue

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

Stock-Based Compensation

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

Foreign Currency Transactions

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

Per-Share Amounts

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

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

	Six Months Ended June 30,
	2026		2025
Escrow shares - exchangeable shares		33		33
Escrow shares - common stock		13		13
Options to purchase common stock		2,166		1,255
Unvested restricted common stock units		200		3
Warrants classified as equity		7,543		8,770
Warrants classified as liabilities		235		235
Total		10,190		10,309

Recently Issued Accounting Pronouncements

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

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

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

Note 2. Fair Value of Financial Instruments

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

	June 30, 2026
	Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds (1)	$	1	$	—	$	—	$	—

Liabilities:
Warrant liabilities	$	19	$	—	$	—	$	19

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

Liabilities:
Warrant liabilities	$	24	$	—	$	—	$	24

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

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

	June 30, 2026
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents	$	3,322	$	—	$	—	$	3,322

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

Note 3. Balance Sheet Detail

	June 30,		December 31,
	2026		2025
	(in thousands)
Inventories:
Raw materials	$	147	$	342
Work-in-process		636		361
Finished goods		925		465
	$	1,708	$	1,168

	June 30,		December 31,
	2026		2025
	(in thousands)
Prepaid expenses and other:
Prepaid inventory and production costs	$	47	$	31
Prepaid insurance		124		36
Prepaid software		78		46
Other		158		82
	$	407	$	195

	June 30,		December 31,
	2026		2025
	(in thousands)
Other:
Deferred equity facility costs	$	290	$	—
Deposits		97		99
Intangible assets, net		3		6
	$	390	$	105

	June 30,		December 31,
	2026		2025
	(in thousands)
Accrued Expenses & Other:
Accrued wages and employee benefits	$	388	$	280
Professional fees, legal and consulting		341		175
Warranty accrual		43		12
Other		111		73
	$	883	$	540

Note 4. Commitments and Contingencies

Leases

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

The lease for the facility in Markham has a 60-month term, which commenced June 21, 2022. The initial right-of-use asset and corresponding liability of approximately CAD$1.0 million for the lease were measured at the present value of the future minimum lease payments. The discount rate used to measure the lease assets and liabilities was 8%. The Markham landlord also provided a lease incentive of approximately CAD$286,200 (the Incentive). In 2023, the Company received payment of CAD$143,100 from the Markham landlord of the first installment of the Incentive. The remaining balance of the Incentive is paid to the Company in the form of an adjustment to rent during the last three months of each calendar year during the remaining lease term. As of June 30, 2026, the pending Incentive to be received was CAD$35,775.

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

The following table provides the details of right-of-use assets and lease liabilities as of June 30, 2026 and December 31, 2025 (in thousands):

	June 30,		December 31,
	2026		2025
Right-of-use assets:
Operating leases	$	105	$	143
Total right-of-use assets	$	105	$	143
Lease liabilities:
Operating leases	$	128	$	192
Total lease liabilities	$	128	$	192

Future minimum payments under the Markham lease at June 30, 2026 are listed in the table below (in thousands):

Year ending December 31,
2026	$	39
2027		96
Total future lease payments		135
Less: imputed interest		(7	)
Present value of lease liabilities	$	128

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

	Six Months Ended June 30,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for leases	$	66	$	164

Rent expense was approximately $0.1 million for the three months ended June 30, 2026 and 2025. Rent expense was approximately $0.3 million and $0.2 million for the six-months ended June 30, 2026 and 2025, respectively. In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs related to the leased facilities and equipment.

Indemnification

In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has also entered into indemnification agreements with its officers and directors. No material amounts were reflected in the Company’s condensed consolidated financial statements for the three months ended June 30, 2026 and 2025 related to these indemnifications.

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

Product Warranties

The Company warrants its products to be free of defects generally for a period of up to two 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 six months ended June 30, 2026 and 2025.

Legal Matters

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

Purchase Obligations

The Company’s primary purchase obligations include non-cancelable purchase orders for inventory. At June 30, 2026, the Company had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $2.4 million.

Note 5. Business Segments, Concentration of Credit Risk and Significant Customers

Segment Information

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

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

Significant segment expenses include research and development expenditures, salaries and benefits, stock-based compensation and software license obligations. Operating expenses include all remaining costs necessary to operate the Company’s business, which primarily include facilities, external professional services and other administrative expenses.

The following table presents the significant segment expenses and other segment items regularly reviewed by the CODM (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
Total net revenue	$	1,307		$	2,220		$	2,270		$	6,089

Less:
Cost of net revenue		474			1,147			845			2,336
Research and development		572			610			1,135			1,214
Compensation		1,464			1,518			2,916			2,962
Stock-based compensation		170			141			317			266
Software license obligations		—			(223	)		—			(223	)
Other operating expenses		863			804			1,777			1,825
Other (income) expense, net		(16	)		52			(3	)		9
Net loss	$	(2,220	)	$	(1,829	)	$	(4,717	)	$	(2,300	)

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				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Europe	$	1,102	$	1,204	$	1,381	$	1,733
Taiwan		5		570		208		1,590
North America		59		8		195		1,779
Rest of the world		141		438		486		987
Total net revenue	$	1,307	$	2,220	$	2,270	$	6,089

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

	Three Months Ended June 30,				Six Months Ended June 30,
Product category	2026		2025		2026		2025
Memory ICs	$	7	$	-	$	27	$	2,267
mmWave ICs		79		1,318		583		2,293
mmWave modules		1,078		886		1,189		1,444
mmWave other products		80		14		112		14
	$	1,244	$	2,218	$	1,911	$	6,018

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Customer A		71	%		*			41	%		*
Customer B		*			32	%		15	%		12	%
Customer C		*			21	%		*			15	%
Customer D		*			17	%		*			*
Customer E		*			17	%		*			*
Customer F		*			*			*			19	%
Customer G		*			*			*			26	%

*	Represents less than 10%

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

	Accounts Receivable
	June 30,			December 31,
	2026			2025
Customer A		39	%		*
Customer B		27	%		*
Customer C		19	%		*
Customer D		14	%		*
Customer E		*			78	%
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:

	June 30,			December 31,
	2026			2025
Vendor A		22	%		23	%
Vendor B		16	%		15	%
Vendor C		*			15	%

*	Represents less than 10%

Note 6. Stock-Based Compensation

Common Stock Equity Plans

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

In August 2019, the Company’s stockholders approved the 2019 Stock Incentive Plan (the 2019 Plan) to replace the Amended 2010 Plan. The 2019 Plan authorizes the board of directors or the compensation committee of the board of directors to grant a broad range of awards including stock options, stock appreciation rights, restricted stock, performance-based awards, and restricted stock units. Under the 2019 Plan, 4,563 shares were initially reserved for issuance. In November 2021, December 2024 and December 2025, the Company’s stockholders approved amendments increasing the number of shares reserved for issuance under the 2019 Plan by 77,674, 1,500,000, and 1,000,000 shares, respectively.

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

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

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

Stock-Based Compensation Expense

The Company reflected compensation costs related to the vesting of stock options of approximately $0.2 million during each of the six-months ended June 30, 2026 and 2025. At June 30, 2026, the unamortized compensation cost was approximately $1.0 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately 1.1 years. The Company reflected compensation costs of approximately $