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What changed in Peraso Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Peraso Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+335 added−322 removedSource: 10-K (2026-03-30) vs 10-K (2025-03-28)

Top changes in Peraso Inc.'s 2025 10-K

335 paragraphs added · 322 removed · 231 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

116 edited+39 added−32 removed102 unchanged
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The Exchangeable Share Purchase Price is payable only by the Company delivering or causing to be delivered to the relevant holder one share of the Company’s common stock for each Exchangeable Share purchased plus a cash amount equal to the amount of any accrued and unpaid dividends on such Exchangeable Share.
The Exchangeable Share Purchase Price is payable only by the Company delivering or causing to be delivered to the relevant holder one share of the Company’s common stock for each Exchangeable Share purchased plus a cash amount equal to the amount of any accrued and unpaid dividends on such Exchangeable Share.
The rights of the Agent, as holder of the Special Voting Share, are limited to effecting the rights of the holders of the Exchangeable Shares; the Special Voting Share does not confer any independent rights to the Agent.
The rights of the Agent, as holder of the Special Voting Share, are limited to effecting the rights of the holders of the Exchangeable Shares; the Special Voting Share does not confer any independent rights to the Agent.
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 pre-funded warrants for 1,424,760 shares of common stock.
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.
Upon exercise of the Existing Warrants, the Company issued 1,328,650 shares of its common stock while the remaining 917,380 shares (Issuable Shares) remained under abeyance, pending issuance instructions from the Holders, pursuant to the terms of the Inducement Letters.
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.
(Ladenburg), as the sole underwriter, relating to the issuance and sale in a public offering (the Offering) of: (i) 480,000 shares of the Company’s 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 (the 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), 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.
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 (the Reduced Exercised Price) 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.
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.
These 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.
These 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.
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 common stock and issuance of convertible notes and loans to investors and affiliates.
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 common stock and warrants and the issuance of convertible notes and loans to investors and affiliates.
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 ASC 480 , Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815) .
Warrants 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).
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.
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.
F-19 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.
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.
F-25 In addition, the Company and Callco have the right to purchase all outstanding Exchangeable Shares at the Exchangeable Share Purchase Price if there is a change of law that permits holders of Exchangeable Shares to exchange their Exchangeable Shares for shares of common stock on a basis that will not require holders to recognize any gain or loss or any actual or deemed dividend for Canadian tax purposes.
In addition, the Company and Callco have the right to purchase all outstanding Exchangeable Shares at the Exchangeable Share Purchase Price if there is a change of law that permits holders of Exchangeable Shares to exchange their Exchangeable Shares for shares of common stock on a basis that will not require holders to recognize any gain or loss or any actual or deemed dividend for Canadian tax purposes.
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 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 mmWave technology.
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.
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.
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 net proceeds from the exercise of the Series A warrants, Series B Warrants and pre-funded warrants, were approximately $3.4 million.
F-26 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.
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 consolidated financial statements for the years ended December 31, 2024 and 2023 related to these indemnifications.
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 consolidated financial statements for the years ended December 31, 2025 and 2024 related to these indemnifications.
Note 6: Retirement Savings Plan Effective January 1997, the Company adopted the Peraso 401(k) Plan (the Savings Plan), which qualifies as a thrift plan under Section 401(k) of the Internal Revenue Code. Full-time and part-time employees who are at least 21 years of age are eligible to participate in the Savings Plan at the time of hire.
Retirement Savings Plan Effective January 1997, the Company adopted the Peraso 401(k) Plan (the Savings Plan), which qualifies as a thrift plan under Section 401(k) of the Internal Revenue Code. Full-time and part-time employees who are at least 21 years of age are eligible to participate in the Savings Plan at the time of hire.
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.
F-12 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.
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 warrants to Ladenburg to purchase up to 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.
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.
Participants may contribute up to 15% of their earnings to the Savings Plan. No matching contributions were made by the Company during the years ended December 31, 2024 and 2023. Note 7.
Participants may contribute up to 15% of their earnings to the Savings Plan. No matching contributions were made by the Company during the years ended December 31, 2025 and 2024. Note 7.
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 The Company’s licensing contracts typically provide for royalties based on the licensee’s use of the Company’s memory technology in its currently shipping commercial products.
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 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 Series C Warrants have an exercise price of $1.61 per share, were exercisable upon issuance and expire on the six-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 Series C Warrants have an exercise price of $1.61 per share, were exercisable upon issuance and originally expired on the six-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 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 300GHz, wireless technology. The Company derives revenue from selling its semiconductor devices and modules and performance of non-recurring engineering services.
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, performance of non-recurring engineering services and licensing of its technology.
No new awards may be made under the Amended 2010 Plan. In August 2019, the Company’s stockholders approved the Amended and Restated 2019 Stock Incentive Plan (the 2019 Plan) to replace the Amended 2010 Plan.
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.
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 years ended December 31, 2024 and 2023.
F-19 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 years ended December 31, 2025 and 2024.
Other recent authoritative guidance issued by the FASB (including technical corrections to the ASCs), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the SEC) did not, or is not expected to, have a material impact on the Company’s consolidated financial statements and related disclosures.
Other recent authoritative guidance issued by the FASB (including technical corrections to the ASCs), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the SEC) did not, or is not expected to, have a material impact on the Company’s consolidated financial statements and related disclosures. F-15 Note 2.
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.
The fair value of the Purchase Warrants at December 31, 2025 was determined using the Black-Scholes model with the assumptions in the following table.
Cash Equivalents and Investments The Company has invested its excess 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.
Cash Equivalents and Investments The Company may invest its excess 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.
Note 2: Fair Value of Financial Instruments The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and 2023 and the basis for that measurement (in thousands): December 31, 2024 Fair Value Level 1 Level 2 Level 3 Assets: Money market funds (1) $ 1 $ — $ — $ — Liabilities: Warrant liability $ 55 $ — $ — $ 55 December 31, 2023 Fair Value Level 1 Level 2 Level 3 Assets: Money market funds (1) $ 1 $ — $ — $ — Liabilities: Warrant liability $ 1,748 $ — $ — $ 1,748 (1) Included in cash and cash equivalents F-16 The following table represents the Company’s determination of fair value for its financial assets (cash equivalents and investments) (in thousands): December 31, 2024 Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents $ 3,344 $ — $ — $ 3,344 December 31, 2023 Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents $ 1,583 $ — $ — $ 1,583 Note 3.
Fair Value of Financial Instruments The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 and the basis for that measurement (in thousands): December 31, 2025 Fair Value Level 1 Level 2 Level 3 Assets: Money market funds (1) $ 1 $ — $ — $ — Liabilities: Warrant liability $ 24 $ — $ — $ 24 December 31, 2024 Fair Value Level 1 Level 2 Level 3 Assets: Money market funds (1) $ 1 $ — $ — $ — Liabilities: Warrant liability $ 55 $ — $ — $ 55 (1) Included in cash and cash equivalents The following table represents the Company’s determination of fair value for its financial assets (cash equivalents and investments) (in thousands): December 31, 2025 Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents $ 2,886 $ — $ — $ 2,886 December 31, 2024 Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents $ 3,344 $ — $ — $ 3,344 F-16 Note 3.
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. Advertising Costs Advertising costs are expensed as incurred. Advertising costs were not significant for the years ended December 31, 2024 and 2023.
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. Advertising Costs Advertising costs are expensed as incurred. Advertising costs were not material for the years ended December 31, 2025 and 2024.
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 part of the Reductions, the Company implemented a temporary lay-off that impacted 16 employees (the Employees) of Peraso Tech. During 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.
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.” Liquidity and Going Concern The Company incurred net losses of approximately $10.7 million and $16.8 million for the years ended December 31, 2024 and 2023, respectively, and had an accumulated deficit of approximately $177.1 million as of December 31, 2024.
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.” Liquidity and Going Concern The Company incurred net losses of approximately $4.8 million and $10.7 million for the years ended December 31, 2025 and 2024, respectively, and had an accumulated deficit of approximately $181.9 million as of December 31, 2025.
The Company accounts for such grants based on ASC No. 718, whereby the value of the award is measured on the date of grant and recognized as compensation expense on a straight-line basis over the vesting period.
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.
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 connection with the Arrangement, 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.
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.
In addition, the Company issued warrants to Ladenburg to purchase up to 157,223 shares of common stock at an exercise price of $1.625, which were exercisable upon issuance, expire on the five-year anniversary of the date of issuance, and have substantially similar terms to the Series C Warrants.
In addition, the Company issued Ladenburg and its designees warrants to purchase up to an aggregate of 157,223 shares of common stock at an exercise price of $1.625, which were exercisable upon issuance, expire on the five-year anniversary of the date of issuance, and other than the foregoing terms, have substantially similar terms to the Series C Warrants.
The Company believes the Section 382 limitations will result in approximately 91% of the federal and state NOLs expiring before they can be utilized, and approximately 94% of the federal tax credit carryforwards expiring before they can be utilized.
The Company believes the Section 382 limitations will result in approximately 91% and 89% of the federal and state NOLs, respectively, expiring before they can be utilized, and approximately 100% of the federal tax credit carryforwards expiring before they can be utilized.
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, rapidly changing customer requirements, limited operating history and the volatility of public markets.
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 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): December 31, 2024 2023 Escrow shares - exchangeable shares 33 33 Escrow shares - common stock 13 13 Options to purchase common stock 30 36 Unvested restricted common stock units 3 15 Warrants classified as equity 8,770 — Warrants classified as liabilities 235 242 Total 9,084 339 Income Taxes The Company determines deferred tax assets and liabilities based upon the differences between the financial statement and tax bases of the Company’s assets and liabilities using tax rates in effect for the year in which the Company expects the differences to affect taxable income.
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): December 31, 2025 2024 Escrow shares - exchangeable shares 33 33 Escrow shares - common stock 13 13 Options to purchase common stock 1,347 30 Unvested restricted common stock units — 3 Warrants classified as equity 8,837 8,770 Warrants classified as liabilities 235 235 Total 10,465 9,084 F-14 Income Taxes The Company determines deferred tax assets and liabilities based upon the differences between the financial statement and tax bases of the Company’s assets and liabilities using tax rates in effect for the year in which the Company expects the differences to affect taxable income.
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 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.
The value of the developed technology was determined by discounting estimated net future cash flows of these products. Amortization related to developed technology of $2.3 million and $2.0 million for the years ended December 31, 2024 and 2023, respectively, was included in cost of net revenue in the consolidated statements of operations.
The value of the developed technology was determined by discounting estimated net future cash flows of these products. Amortization related to developed technology of $2.3 million for the year ended December 31, 2024, was included in cost of net revenue in the consolidated statements of operations.
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 initially having an aggregate offering price of up to $1,425,000.
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.
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 December 31, 2024, the Company had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $3.1 million.
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 December 31, 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.
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. The Series B warrants would otherwise have expired on October 7, 2024.
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.
At December 31, 2024, the unamortized compensation cost was approximately $0.2 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately one year.
At December 31, 2025, the unamortized compensation cost was approximately $0.6 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately 2.0 years.
Research and Development Engineering costs are recorded as research and development expense in the period incurred. Stock-Based Compensation The Company periodically issues stock options and restricted stock awards to employees and non-employees.
F-13 Research and Development Engineering costs are recorded as research and development expense in the period incurred. Stock-Based Compensation The Company periodically issues stock options and restricted stock units (RSUs) to employees and non-employees.
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.
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.
The Shares sold pursuant to the Purchase Agreement were issued as restricted securities, as defined in Rule 144 of the Securities Act of 1933, as amended. F-27 Shares Issued for Services In August 2024, the Company issued 40,000 unregistered shares of common stock with a fair value of approximately $54,400 to a service provider.
The Shares sold pursuant to the Purchase Agreement were issued as restricted securities, as defined in Rule 144 of the Securities Act of 1933, as amended. 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.
F-31 The 2009 Plan, the Amended 2010 Plan and the 2019 Plan are referred to collectively as the “Plans.” Stock-Based Compensation Expense The Company recorded compensation costs of $2.8 million and $4.2 million related to the vesting of stock options during the years ended December 31, 2024 and 2023, respectively.
The 2009 Plan, the Amended 2010 Plan and the 2019 Plan are referred to collectively as the “Plans.” F-31 Stock-Based Compensation Expense The Company reflected compensation costs related to the vesting of stock options of approximately $488,600 and $2.8 million during the years ended December 31, 2025 and 2024, respectively.
F-20 The Company’s chief executive officer is the chief operating decision maker (CODM) and evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis.
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).
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. The Company recorded write-downs of inventory of approximately $359,000 and $3,558,000 during the years ended December 31, 2024 and 2023, respectively. Property and Equipment Property and equipment are originally recorded at cost.
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. The Company recorded write-downs of inventory of approximately $36,000 and $0.4 million during the years ended December 31, 2025 and 2024, respectively. Property and Equipment Property and equipment are originally recorded at cost.
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 millimeter wavelength wireless technology, or mmWave, semiconductor devices and antenna modules and performance of non-recurring engineering, or NRE, services and licensing of intellectual property, or IP.
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.
As of December 31, 2024, the Company also had federal research and development tax credit carryforwards of approximately $8.2 million that will expire at various times through 2044, and California research and development credits of approximately $8.5 million, which do not have an expiration date.
As of December 31, 2025, the Company also had federal research and development tax credit carryforwards of approximately $8.0 million that will expire at various times through 2042, California research and development credits of approximately $8.5 million, which do not have an expiration date, and foreign research and development tax credit carryforwards of approximately $4.4 million that will expire at various times through 2040.
Intangible assets subject to amortization, including those acquired in business combinations were as follows (amounts in thousands): December 31, 2024 Gross Net Carrying Accumulated Other Carrying Amount Amortization Impairment Amount Developed technology $ 5,726 $ (5,726 ) $ — $ — Customer relationships 2,556 (2,556 ) — — Other 186 (67 ) (106 ) 13 Total $ 8,468 $ (8,349 ) $ (106 ) $ 13 December 31, 2023 Gross Net Carrying Accumulated Other Carrying Amount Amortization Impairment Amount Developed technology $ 5,726 $ (3,471 ) $ — $ 2,255 Customer relationships 2,556 (1,550 ) — 1,006 Other 186 (61 ) (106 ) 19 Total $ 8,468 $ (5,082 ) $ (106 ) $ 3,280 Developed technology primarily consisted of MoSys’ products that had reached technological feasibility and primarily related to its memory semiconductor products and technology.
Intangible assets subject to amortization, including those acquired in business combinations were as follows (amounts in thousands): December 31, 2025 Gross Net Carrying Accumulated Other Carrying Amount Amortization Impairment Amount Developed technology $ 5,726 $ (5,726 ) $ — $ — Customer relationships 2,556 (2,556 ) — — Other 186 (74 ) (106 ) 6 Total $ 8,468 $ (8,356 ) $ (106 ) $ 6 December 31, 2024 Gross Net Carrying Accumulated Other Carrying Amount Amortization Impairment Amount Developed technology $ 5,726 $ (5,726 ) $ — $ — Customer relationships 2,556 (2,556 ) — — Other 186 (67 ) (106 ) 13 Total $ 8,468 $ (8,349 ) $ (106 ) $ 13 Developed technology primarily consisted of MoSys’ products that had reached technological feasibility and primarily related to its memory semiconductor products and technology.
Warrants Classified as Liabilities The securities purchase agreements governing the 2023 Purchase Warrant and the 2022 Purchase Warrant (collectively, the Purchase Warrants) provide for a value calculation for such warrants using the Black Scholes model in the event of certain fundamental transactions.
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.
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.
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 2018 through 2023 tax years generally remain subject to examination by U.S. federal and state tax authorities, and the 2020 through 2023 tax years generally remain subject to examination by foreign tax authorities.
The 2021 through 2025 tax years generally remain subject to examination by U.S. federal and state tax authorities, and the 2022 through 2025 tax years generally remain subject to examination by foreign tax authorities.
The table also includes the total fair value determined at valuation date based on these assumptions. 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 The fair value of the Purchase Warrants at December 31, 2023 was determined using the Black Scholes model with the assumptions in the following table.
The table also includes the total fair value determined as of December 31, 2025 based on these assumptions. 2022 Purchase Warrant 2023 Purchase Warrant Expected term based on contractual term 2.4 years 2.4 years Interest rate (risk-free rate): 3.71 % 3.71 % Expected volatility 129 % 129 % Expected dividend — — Fair value of warrants (in thousands) $ 11 $ 13 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.
The following table provides the details of right-of-use assets and lease liabilities as of December 31, 2024 (in thousands): Year Ended December 31, 2024 2023 Right-of-use assets: Operating leases $ 213 $ 422 Finance leases 54 193 Total right-of-use assets $ 267 $ 615 Lease liabilities: Operating leases $ 266 $ 525 Finance leases 55 194 Total lease liabilities $ 321 $ 719 Future minimum payments under the leases at December 31, 2024 are listed in the table below (in thousands): Year ending December 31, 2025 $ 158 2026 101 2027 94 Total future lease payments 353 Less: imputed interest (32 ) Present value of lease liabilities $ 321 The following table provides the details of supplemental cash flow information (in thousands): Year Ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for leases $ 487 $ 674 Rent expense was approximately $0.7 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively.
F-18 The following table provides the details of right-of-use assets and lease liabilities as of December 31, 2025 (in thousands): Year Ended December 31, 2025 2024 Right-of-use assets: Operating leases $ 143 $ 213 Finance leases — 54 Total right-of-use assets $ 143 $ 267 Lease liabilities: Operating leases $ 192 $ 266 Finance leases — 55 Total lease liabilities $ 192 $ 321 Future minimum payments under the leases at December 31, 2025 are listed in the table below (in thousands): Year ending December 31, 2026 $ 106 2027 99 Total future lease payments 205 Less: imputed interest (13 ) Present value of lease liabilities $ 192 The following table provides the details of supplemental cash flow information (in thousands): Year Ended December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for leases $ 161 $ 487 Rent expense was approximately $0.5 million and $0.7 million for the years ended December 31, 2025 and 2024, respectively.
In December 2023, the Company renewed the Toronto office lease for a reduced amount of square footage for a one-year term, which commenced January 1, 2024. Upon the renewal of the Toronto lease in December 2023, the Company recognized a right-of-use asset of approximately $137,700.
As of December 31, 2025, the pending Incentive to be received was CAD$35,775. In December 2023, the Company renewed the Toronto office lease for a reduced amount of square footage for a one-year term, which commenced January 1, 2024. Upon the renewal of the Toronto lease in December 2023, the Company recognized a right-of-use asset of approximately $137,700.
The Company recorded compensation costs of $0.8 million and $1.0 million related to the vesting of restricted stock units during the years ended December 31, 2024 and 2023, respectively.
The Company reflected compensation costs of approximately $32,500 and $0.8 million related to the vesting of restricted stock units during the years ended December 31, 2025 and 2024, respectively.
A reconciliation of income taxes provided at the federal statutory rate to the actual income tax provision is as follows (in thousands): Year Ended December 31, 2024 2023 Income tax benefit computed at U.S. statutory rate $ 359 $ 277 Stock-based compensation — 9 Amortization of intangible assets (60 ) (60 ) Change in fair value of warrant liabilities (356 ) (734 ) Valuation allowance changes affecting tax provision 62 506 Other (5 ) 2 Income tax provision $ — $ — Note 9.
A reconciliation of income taxes provided at the federal statutory rate to the actual income tax provision is as follows (in thousands): Year Ended December 31, 2025 2024 Income tax benefit computed at U.S. statutory rate $ (998 ) $ 359 Foreign taxes in excess of U.S. rates 79 — Amortization of intangible assets — (60 ) Change in fair value of warrant liabilities (6 ) (356 ) Change in state rate 846 — Valuation allowance changes affecting tax provision 106 62 Other (27 ) (5 ) Income tax provision $ — $ — Note 9.
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. As of December 31, 2024, there were remaining severance liabilities of approximately $118,000, which are expected to be paid through October 2025.
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 December 31, 2025.
CONSOLIDATED BALANCE SHEETS (In thousands, except par value) December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 3,344 $ 1,583 Accounts receivable, net 682 731 Inventories, net 2,079 2,606 Prepaid expenses and other 188 620 Total current assets 6,293 5,540 Property and equipment, net 512 1,156 Right-of-use lease assets 267 615 Intangible assets, net 13 3,280 Other 121 123 Total assets $ 7,206 $ 10,714 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 1,036 $ 2,448 Accrued expenses and other 1,987 611 Deferred revenue 341 1,105 Short-term lease liabilities 139 370 Total current liabilities 3,503 4,534 Long-term lease liabilities 182 349 Warrant liabilities 55 1,748 Total liabilities 3,740 6,631 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 December 31, 2024 and 2023 — — Common stock, $0.001 par value; 120,000 shares authorized; 4,474 shares and 673 shares issued and outstanding at December 31, 2024 and 2023, respectively 3 1 Exchangeable shares, no par value; unlimited shares authorized; 60 shares and 95 shares outstanding at December 31, 2024 and 2023, respectively — — Issuable shares, 917 shares at December 31, 2024 1,193 — Additional paid-in capital 179,390 170,474 Accumulated deficit (177,120 ) (166,392 ) Total stockholders’ equity 3,466 4,083 Total liabilities and stockholders’ equity $ 7,206 $ 10,714 The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED BALANCE SHEETS (In thousands, except par value) December 31, 2025 2024 ASSETS Current assets Cash and cash equivalents $ 2,886 $ 3,344 Accounts receivable, net 1,219 682 Inventories, net 1,168 2,079 Prepaid expenses and other 195 188 Total current assets 5,468 6,293 Property and equipment, net 363 512 Right-of-use lease assets 143 267 Intangible assets, net 6 13 Other 99 121 Total assets $ 6,079 $ 7,206 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 679 $ 1,036 Accrued expenses and other 540 1,987 Deferred revenue 8 341 Short-term lease liabilities 95 139 Total current liabilities 1,322 3,503 Long-term lease liabilities 97 182 Warrant liabilities 24 55 Total liabilities 1,443 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 December 31, 2025 and 2024 — — Common stock, $0.001 par value; 120,000 shares authorized; 10,055 shares and 4,474 shares issued and outstanding at December 31, 2025 and 2024, respectively 9 3 Exchangeable shares, no par value; unlimited shares authorized; 56 shares and 60 shares outstanding at December 31, 2025 and 2024, respectively — — Issuable shares, 137 and 917 shares at December 31, 2025 and 2024, respectively 162 1,193 Additional paid-in capital 186,338 179,390 Accumulated deficit (181,873 ) (177,120 ) Total stockholders’ equity 4,636 3,466 Total liabilities and stockholders’ equity $ 6,079 $ 7,206 The accompanying notes are an integral part of these consolidated financial statements.
Subsequent events Issuance of Common Stock under ATM Offering Program During January 2025, the Company sold 327,943 shares of common stock for net proceeds of approximately $431,900 pursuant to the Sales Agreement (see Note 9).
Subsequent Events Issuance of Common Stock under ATM Offering Program Subsequent to December 31, 2025, the Company sold 2,371,943 shares of common stock for net proceeds of approximately $2,303,000 pursuant to the Sales Agreement (see Note 9).
The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM: Year Ended December 31, 2024 2023 Total net revenue $ 14,573 $ 13,749 Less: Cost of net revenue 7,040 11,877 Research and development 3,303 5,002 Salaries 6,138 8,447 Stock-based compensation 3,588 5,213 Severance and software license obligations 2,063 — Other operating expenses 4,876 3,835 Other income (1,707 ) (3,830 ) Net loss $ (10,728 ) $ (16,795 ) Concentrations The Company recognized revenue from shipments of product, licensing of its technologies and performance of services to customers by geographical location as follows (in thousands): Year Ended December 31, 2024 2023 North America $ 12,478 $ 8,786 Hong Kong 474 689 Taiwan 238 2,633 Rest of world 1,383 1,641 Total net revenue $ 14,573 $ 13,749 F-21 The following is a breakdown of product revenue by category (in thousands): (amounts in thousands) Years Ended December 31, Year-Over-Year Product category 2024 2023 change Memory ICs $ 12,914 $ 8,446 4,468 mmWave ICs 302 2,726 (2,424 ) mmWave modules 1,007 1,677 (670 ) mmWave other products 25 4 21 $ 14,248 $ 12,853 $ 1,395 The following table lists significant customers that represented more than 10% of the Company’s total revenue during each respective period: Year Ended December 31, 2024 2023 Customer A 61 % 22 % Customer B 25 % 35 % Customer C * 18 % The following table lists significant customers that represented more than 10% of the Company’s net accounts receivable balance at each respective balance sheet date: Accounts Receivable As of December 31, 2024 2023 Customer A 58 % 33 % Customer B 15 % * Customer C * 36 % Customer D 18 % * Customer E * 14 % The following table lists significant vendors that represented more than 10% of the Company’s total accounts payable balance at each respective balance sheet date: Accounts Payable As of December 31, 2024 2023 Vendor A 16 % * Vendor B 15 % 12 % Vendor C * 47 % * Represents less than 10% F-22 Note 8.
The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM: Year Ended December 31, 2025 2024 Total net revenue $ 12,193 $ 14,573 Less: Cost of net revenue 5,126 7,040 Research and development 2,171 3,303 Salaries 5,829 6,138 Stock-based compensation 522 3,588 Severance and software license obligations (223 ) 2,063 Other operating expenses 3,528 4,876 Other income (7 ) (1,707 ) Net loss $ (4,753 ) $ (10,728 ) 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): Year Ended December 31, 2025 2024 Taiwan $ 5,275 $ 238 Europe 3,132 995 North America 2,356 12,478 Hong Kong 14 474 Rest of world 1,416 388 Total net revenue $ 12,193 $ 14,573 The following is a breakdown of product revenue by category (in thousands): Years Ended December 31, Product category 2025 2024 Memory ICs $ 2,720 $ 12,914 mmWave ICs 6,734 302 mmWave modules 2,293 1,007 mmWave other products 98 25 $ 11,845 $ 14,248 F-21 The following table lists significant customers that represented more than 10% of total revenue during each respective period: Year Ended December 31, 2025 2024 Customer A 29 % * Customer B 13 % 61 % Customer C 13 % * Customer D 13 % * Customer E 12 % * Customer F * 25 % * 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 As of December 31, 2025 2024 Customer A 78 % * Customer B 15 % * Customer C * 58 % Customer D * 15 % Customer E * 18 % * 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 As of December 31, 2025 2024 Vendor A 23 % * Vendor B 15 % * Vendor C 15 % * Vendor D * 16 % Vendor E * 15 % * Represents less than 10% F-22 Note 8.
Income Tax Provision The income tax provision consisted of the following (in thousands): Year Ended December 31, 2024 2023 Current portion: Federal and state $ — $ — Deferred portion: Federal (381 ) (2,545 ) State 83 (1,392 ) (298 ) (3,937 ) Change in valuation allowance 298 3,937 Provision for income taxes $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Income Tax Provision The income tax provision consisted of the following (in thousands): Year Ended December 31, 2025 2024 Current portion: Federal and state $ — $ — Deferred portion: Federal 3,903 (381 ) State 946 83 Foreign (35,136 ) (34,793 ) (30,287 ) (35,091 ) Change in valuation allowance 30,287 35,091 Provision for income taxes $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
(in thousands, except exercise price): Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance as of December 31, 2022 39 37 $ 132.80 RSUs granted (5 ) — — RSUs cancelled and returned to the 2019 Plan 5 — — Options cancelled — (1 ) $ 321.30 Balance as of December 31, 2023 39 36 $ 127.00 Additional shares authorized under the 2019 Plan 1,500 — — RSUs granted (2 ) — — RSUs cancelled and returned to the 2019 Plan 7 — — Options cancelled — (6 ) $ 110.88 Balance as of December 31, 2024 1,544 30 $ 130.14 F-32 The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2024 (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 - $62.80 2 4.89 $ 62.80 2 $ 62.80 $ — $62.81 - $599.60 28 5.99 $ 110.31 27 $ 110.71 $ — $0.00 - $599.60 30 5.90 $ 130.14 29 $ 131.60 $ — 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, 2022 27 $ 82.46 Granted 4 $ 24.62 Vested (14 ) $ 75.72 Effect of business combination (2 ) $ 82.90 Non-vested shares as of December 31, 2023 15 $ 69.63 Granted 2 $ 1.55 Vested (12 ) $ 1.24 Cancelled (3 ) $ 63.10 Non-vested shares as of December 31, 2024 2 $ 37.69 Note 12.
F-32 The following table summarizes the activity in the shares available for grant under the Plans during the years ended December 31, 2025 and 2024 and options outstanding as of December 31, 2025 and 2024 (in thousands, except exercise price): Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance as of December 31, 2023 39 36 $ 127.00 Additional shares authorized under the 2019 Plan 1,500 — — RSUs granted (2 ) — — RSUs cancelled and returned to the 2019 Plan 7 — — Options cancelled — (6 ) $ 110.88 Balance as of December 31, 2024 1,544 30 $ 130.14 Additional shares authorized under the 2019 Plan 1,000 — — RSUs granted (2 ) — — RSUs cancelled and returned to the 2019 Plan 1 — — Options granted (1,450 ) 1,450 $ 0.78 Options exercised — (37 ) $ 0.78 Options cancelled and returned to the 2019 Plan 96 (96 ) $ 0.78 Balance as of December 31, 2025 1,189 1,347 $ 3.34 The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 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 1,317 9.16 $ 0.78 326 $ 0.78 $ 31 $1.01 - $62.90 2 3.89 $ 62.80 2 $ 62.80 $ — $62.81 - $599.60 28 4.93 $ 110.17 28 $ 110.17 $ — $0.00 - $599.60 1,347 9.06 $ 3.34 356 $ 10.44 $ 31 F-33 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, 2023 15 $ 69.63 Granted 2 $ 1.55 Vested (12 ) $ 1.24 Cancelled (3 ) $ 63.10 Non-vested shares as of December 31, 2024 2 $ 37.69 Granted 2 $ 1.00 Vested (3 ) $ 15.40 Cancelled (1 ) $ 65.20 Non-vested shares as of December 31, 2025 — Note 12.
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.
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.
Significant components of the Company’s deferred tax assets and liabilities were (in thousands): Year Ended December 31, 2024 2023 Deferred tax assets: Federal and state loss carryforwards $ 4,732 $ 4,847 Reserves, accruals and other 322 328 Depreciation and amortization 1,792 1,329 Deferred stock-based compensation 2,450 2,429 Capitalized research and development costs 595 660 Research and development credit carryforwards 6,744 6,744 Total deferred tax assets 16,635 16,337 Less: Valuation allowance (16,635 ) (16,337 ) Net deferred tax assets, net $ — $ — Utilization of the Company’s net operating losses (NOLs) and tax credit carryforwards is subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code (IRC) and similar state provisions.
Significant components of the Company’s deferred tax assets and liabilities were (in thousands): Year Ended December 31, 2025 2024 Deferred tax assets: Federal, state and foreign loss carryforwards $ 34,616 $ 34,231 Reserves, accruals and other 588 1,195 Depreciation and amortization 44 1,792 Deferred stock-based compensation 39 2,450 Capitalized research and development costs 464 595 Research and development credit carryforwards 11,170 11,165 Total deferred tax assets 46,921 51,428 Less: Valuation allowance (46,921 ) (51,428 ) Net deferred tax assets, net $ — $ — Utilization of the Company’s net operating losses (NOLs) and tax credit carryforwards is subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code (IRC) and similar state provisions.
The table also includes the total fair value determined at valuation date based on these assumptions. 2022 Purchase Warrant 2023 Purchase Warrant Expected term based on contractual term 4.4 years 4.4 years Interest rate (risk-free rate): 3.84 % 3.84 % Expected volatility 116 % 116 % Expected dividend — — Fair value of warrants (in thousands) $ 653 $ 1,095 F-30 Warrants Classified as Equity As of December 31, 2024, the Company had the following equity-classified warrants outstanding (share amounts in thousands): Warrant Type Number of Shares Exercise Price Expiration Balance as of December 31, 2023 7 $ 28.00 June 2, 2028 Pre-funded warrants issued 1,425 $ 0.001 — Pre-funded warrants exercised (1,425 ) $ 0.001 — Series A warrants issued 3,975 $ 2.250 February 8, 2029 Series A warrants issued 139 $ 2.625 February 8, 2029 Series B warrants issued 3,974 $ 2.250 November 8, 2024 Series B warrants exercised (2,246 ) $ 1.310 — Series B warrants expired (1,728 ) $ 1.310 November 8, 2024 Series C warrants issued 2,246 $ 1.610 May 5, 2025 Series C warrants issued 157 $ 1.625 November 5, 2029 Series D warrants issued 2,246 $ 1.610 November 5, 2029 Balance as of December 31, 2024 8,770 The outstanding equity-classified warrants had no intrinsic value at December 31, 2024.
The table also includes the total fair value determined at December 31, 2024 based on these assumptions. 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 F-30 Warrants Classified as Equity As of December 31, 2025, the Company had the following equity-classified warrants outstanding (share amounts in thousands): Warrant Type Number of Shares Exercise Price Expiration Common stock warrants 7 $ 28.00 June 2, 2028 Series A warrants issued 3,975 $ 2.250 February 8, 2029 Series A warrants issued 139 $ 2.625 February 8, 2029 Series C warrants issued 2,246 $ 1.610 January 7, 2026 Series C warrants exercised (952 ) $ 1.610 — Series C warrants issued 157 $ 1.625 November 6, 2029 Series D warrants issued 2,246 $ 1.610 November 6, 2029 Series E warrants issued 952 $ 1.250 September 12, 2031 Series E warrants issued 67 $ 1.475 September 12, 2030 Balance as of December 31, 2025 8,837 The outstanding equity-classified warrants had no intrinsic value at December 31, 2025.
The unamortized compensation cost at December 31, 2024 was $0.1 million related to restricted stock units and is expected to be recognized as expense over a weighted average period of approximately one year.
The unamortized compensation cost at December 31, 2025 was approximately $2,000 related to restricted stock units and is expected to be recognized as expense over a weighted average period of less than 1.0 year. No stock options were granted or exercised during the year ended December 31, 2024.
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, with (i) the number of shares of common stock subject to each option multiplied by the Exchange Ratio and (ii) the per share exercise price upon the exercise of each option divided by the Exchange Ratio.
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.
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended December 31, 2024 2023 Net revenue Product $ 14,248 $ 12,853 Royalty and other 325 896 Total net revenue 14,573 13,749 Cost of net revenue 7,040 11,877 Gross profit 7,533 1,872 Operating expenses Research and development 9,232 14,398 Selling, general and administrative 8,673 8,505 Severance and software license obligations 2,063 — Gain on license and asset sale — (406 ) Total operating expenses 19,968 22,497 Loss from operations (12,435 ) (20,625 ) Interest expense (10 ) (21 ) Change in fair value of warrant liabilities 1,693 3,493 Other income, net 24 358 Net loss $ (10,728 ) $ (16,795 ) Net loss per share Basic and diluted $ (3.57 ) $ (26.00 ) Shares used in computing net loss per share Basic and diluted 3,002 646 The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended December 31, 2025 2024 Net revenue Product $ 11,845 $ 14,248 Royalty and other 348 325 Total net revenue 12,193 14,573 Cost of net revenue 5,126 7,040 Gross profit 7,067 7,533 Operating expenses Research and development 6,245 9,232 Selling, general and administrative 5,805 8,673 Severance and software license obligations (223 ) 2,063 Total operating expenses 11,827 19,968 Loss from operations (4,760 ) (12,435 ) Interest expense (1 ) (10 ) Change in fair value of warrant liabilities 31 1,693 Other income (expense), net (23 ) 24 Net loss $ (4,753 ) $ (10,728 ) Net loss per share Basic and diluted $ (0.67 ) $ (3.57 ) Shares used in computing net loss per share Basic and diluted 7,064 3,002 The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ (10,728 ) $ (16,795 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,911 3,811 Stock-based compensation 3,588 5,213 Change in fair value of warrant liabilities (1,693 ) (3,493 ) Inventory write-down 359 3,558 Shares issued for services 54 — Allowance for bad debt (2 ) (154 ) Accrued interest on debt obligation (10 ) (22 ) Impairment of intangible assets and property and equipment — 349 Other 3 3 Changes in assets and liabilities Accounts receivable 51 2,667 Inventories 168 (816 ) Prepaid expenses and other assets 432 595 Accounts payable (1,412 ) 604 Right-of-use assets 348 670 Lease liabilities - operating (260 ) (447 ) Accrued expenses and other 1,376 (1,206 ) Deferred revenue (764 ) 773 Net cash used in operating activities (4,579 ) (4,690 ) Cash flows from investing activities: Purchases of property and equipment — (94 ) Proceeds from maturities of marketable securities — 1,100 Net cash provided by investing activities — 1,006 Cash flows from financing activities: Proceeds from at-the-market sales of stock, net 333 — Proceeds from warrant inducement, net 2,582 — Proceeds from sale of common stock and warrants, net 3,559 3,595 Repayment of financing lease (128 ) (107 ) Taxes paid to net share settle equity awards (6 ) (49 ) Net cash provided by financing activities 6,340 3,439 Net decrease in cash and cash equivalents 1,761 (245 ) Cash and cash equivalents at beginning of year 1,583 1,828 Cash and cash equivalents at end of year $ 3,344 $ 1,583 Supplemental disclosure: Noncash investing and financing activities: Initial recognition of warrant liability $ — $ 3,162 Recognition of right-of-use assets and lease liabilities $ — $ 138 Unrealized loss on available-for-sale securities $ — $ (26 ) The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ (4,753 ) $ (10,728 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 263 3,911 Stock-based compensation 521 3,588 Change in fair value of warrant liabilities (31 ) (1,693 ) Inventory write downs 36 359 Shares issued for services 90 54 Allowance for bad debt (21 ) (2 ) Accrued interest on debt obligation and other — (7 ) Changes in assets and liabilities Accounts receivable (516 ) 51 Inventories 875 168 Prepaid expenses and other assets 15 432 Accounts payable (357 ) (1,412 ) Right-of-use assets 124 348 Lease liabilities - operating (76 ) (260 ) Accrued expenses and other (1,447 ) 1,376 Deferred revenue (333 ) (764 ) Net cash used in operating activities (5,610 ) (4,579 ) Cash flows from investing activities: Purchases of property and equipment (107 ) — Net cash used in investing activities (107 ) — Cash flows from financing activities: Proceeds from at-the-market sales of stock, net 4,351 333 Proceeds from warrant inducement, net 933 2,582 Proceeds from sale of common stock and warrants, net 28 3,559 Repayment of financing lease (53 ) (128 ) Taxes paid to net share settle equity awards — (6 ) Net cash provided by financing activities 5,259 6,340 Net increase (decrease) in cash and cash equivalents (458 ) 1,761 Cash and cash equivalents at beginning of year 3,344 1,583 Cash and cash equivalents at end of year $ 2,886 $ 3,344 The accompanying notes are an integral part of these consolidated financial statements.
The Company accounted for the issuance of the: i) 1,328,650 shares of its common stock, ii) the Series C warrants to purchase 2,246,030 shares of the Company’s stock, iii) the Series D warrants to purchase 2,246,030 shares of the Company’s stock, and iv) the remaining 917,380 Issuable Shares as a single equity transaction for gross proceeds of approximately $2.92 million at the reduced exercise price of $1.30 per share.
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.
As of December 31, 2024 and 2023, contract liabilities were in a current position and included in deferred revenue. During the year ended December 31, 2024, the Company recognized approximately $1,040,000 of revenue that had been included in deferred revenue as of December 31, 2023. See Note 7 for disaggregation of revenue by geography.
During the year ended December 31, 2025, the Company recognized approximately $333,400 of revenue that had been included in deferred revenue as of December 31, 2024. See Note 7 for disaggregation of revenue by geography.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ( In thousands ) Series A Special Voting Additional Accumulated Other Total Preferred Stock Common Stock Issuable Shares Exchangeable Shares Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Shares Amount Capital Loss Deficit Equity Balance as of December 31, 2022 — $ — 357 $ — — $ — 228 $ — $ 164,879 $ (25 ) $ (149,597 ) $ 15,257 Exchange of exchangeable shares — — 133 1 — — (133 ) — (1 ) — — — Issuance of common stock under stock plans, net of taxes paid related to net share settlements of restricted stock units — — 12 — — — — — (49 ) — — (49 ) Sale of common stock and warrants — — 56 — — — — — 3,548 — — 3,548 Issuance of common stock upon exercise of warrants — — 115 — — — — — 46 — — 46 Initial recognition of fair value of warrant liability — — — — — — — — (3,162 ) — — (3,162 ) Unrealized gain on available-for-sale securities — — — — — — — — — 25 — 25 Stock-based compensation — — — — — — — — 5,213 — — 5,213 Net loss — — — — — — — — — — (16,795 ) (16,795 ) Balance as of December 31, 2023 — — 673 1 — — 95 — 170,474 — (166,392 ) 4,083 Shares issued for reverse stock split — — 51 — — — — — — — — — Exchange of exchangeable shares — — 35 — — — (35 ) — — — — — Issuance of common stock under stock plans, net of taxes paid related to net share settlements of restricted stock units — — 7 — — — — — (6 ) — — (6 ) Sale of common stock and warrants, net — — 562 — — — — — 3,431 — — 3,431 Issuance of common stock and warrants from warrant inducement offering, net — — 1,329 — 917 1,193 — — 1,389 — — 2,582 Sale of common stock — — 100 — — — — — 127 — — 127 Issuance of common stock upon exercise of pre-funded warrants — — 1,425 2 — — — — — — — 2 At-the market sales of stock, net — — 252 — — — — — 333 — — 333 Shares issued for services — — 40 — — — — — 54 — — 54 Stock-based compensation — — — — — — — — 3,588 — — 3,588 Net loss — — — — — — — — — — (10,728 ) (10,728 ) Balance as of December 31, 2024 — $ — 4,474 $ 3 917 $ 1,193 60 $ — $ 179,390 $ — $ (177,120 ) $ 3,466 The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) Additional Total Common Stock Issuable Shares Exchangeable Shares Paid-In Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance as of December 31, 2023 673 $ 1 — $ — 95 $ — $ 170,474 $ (166,392 ) $ 4,083 Shares issued for reverse stock split 51 — — — — — — — — Exchange of exchangeable shares 35 — — — (35 ) — — — — Issuance of common stock under stock plans, net of taxes paid related to net share settlements of restricted stock units 7 — — — — — (6 ) — (6 ) Sale of common stock and warrants, net 562 — — — — — 3,431 — 3,431 Issuance of common stock and warrants from warrant inducement offering, net 1,329 — 917 1,193 — — 1,389 — 2,582 Sale of common stock 100 — — — — — 127 — 127 Issuance of common stock upon exercise of pre-funded warrants 1,425 2 — — — — — — 2 At-the market sales of stock, net 252 — — — — — 333 — 333 Shares issued for services 40 — — — — — 54 — 54 Stock-based compensation — — — — — — 3,588 — 3,588 Net loss — — — — — — — (10,728 ) (10,728 ) 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 3,714 4 — — — — 4,347 — 4,351 Issuance of abeyance shares 1,618 2 (1,617 ) (2,019 ) — — 2,017 — — Exchange of exchangeable shares 4 — — — (4 ) — — — — Issuance of common stock and warrants from warrant inducement offering, net 115 — 837 988 — — (55 ) — 933 Issuance of common stock under stock plans 40 — — — — — 28 — 28 Shares issued for services 90 — — — — — 90 — 90 Stock-based compensation — — — — — — 521 — 521 Net loss — — — — — — — (4,753 ) (4,753 ) Balance as of December 31, 2025 10,055 $ 9 137 $ 162 56 $ — $ 186,338 $ (181,873 ) $ 4,636 The accompanying notes are an integral part of these consolidated financial statements.
F-13 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.
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 December 31, 2025 and 2024, contract liabilities were in a current position and included in deferred revenue.
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.
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, we may incur substantial litigation expense which would adversely affect our profitability. ● The discovery of defects in our technology and products could expose us to liability for damages. ● We might not be able to protect and enforce our IP rights, which could impair our ability to compete and reduce the value of our technology. ● We currently maintain and may expand operations outside of the United States, which exposes us to significant risks. ● International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our business, results of operations and financial condition. ● Third parties might attempt to gain unauthorized access to our network or seek to compromise our products and services.
Biggest changeIn addition, we may incur substantial litigation expense which would adversely affect our profitability. ● The discovery of defects in our technology and products could expose us to liability for damages. ● We might not be able to protect and enforce our IP rights, which could impair our ability to compete and reduce the value of our technology. ● Our evaluation of strategic alternatives, including Mobix Labs’ proposal, may not result in a transaction or increased value for our stockholders and could create business disruption and stock price volatility. ● We currently maintain and may expand operations outside of the United States, which exposes us to significant risks. ● International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our business, results of operations and financial condition. ● Third parties might attempt to gain unauthorized access to our network or seek to compromise our products and services. 10 Risks Related to Our Securities ● There may be future sales of our common stock, which could adversely affect the market price of our common stock and dilute a stockholder’s ownership of common stock. ● Provisions of our certificate of incorporation and bylaws or Delaware law might delay or prevent a change-of-control transaction and depress the market price of our stock. ● If we are unable to satisfy the continued listing requirements of the Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected.
If we do not continue to win designs in the short term, our product revenue in the following years will not grow. ● To date, we have not achieved the anticipated benefits of a fabless semiconductor company. ● Our main objective is the development and sale of our technologies to OEMS, service providers and other equipment manufacturers and their subsystem and component vendors and, if demand for these products does not grow, we may not achieve revenue growth and our strategic objectives. ● Our failure to continue to develop new products and enhance our products on a timely basis could diminish our ability to attract and retain customers. ● Our products have a lengthy sales cycle, which makes it difficult to predict success in this market and the timing of future revenue. ● The semiconductor industry is cyclical in nature and subject to periodic downturns, which can negatively affect our revenue. ● Our revenue has been highly concentrated among a small number of customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it. 9 ● Our revenue concentration may also pose credit risks which could negatively affect our cash flow and financial condition. ● Our products must meet exact specifications and defects and failures may occur, which may cause customers to return or stop buying our products. ● Because we sell our products on a purchase order basis and rely on estimated forecasts of our customers’ needs, inaccurate forecasts could adversely affect our business. ● We rely on independent foundries and contractors for the manufacture, assembly, testing and packaging of our integrated circuits and modules, and the failure of any of these third parties to deliver products or otherwise perform as requested could damage our relationships with our customers and harm our sales and financial results. ● Disruptions in our supply chain due to shortages in the global semiconductor supply chain could cause delays for customers and impact revenue. ● Any claim that our products or technology infringe third party IP rights could increase our costs of operation and distract management and could result in expensive settlement costs or the discontinuance of our technology licensing or product offerings.
If we do not continue to win designs in the short term, our product revenue in the following years will not grow. ● To date, we have not achieved the anticipated benefits of conducting business as a fabless semiconductor company. ● Our main objective is the development and sale of our technologies to OEMS, service providers and other equipment manufacturers and their subsystem and component vendors and, if demand for these products does not grow, we may not achieve revenue growth and our strategic objectives. 9 ● Our failure to continue to develop new products and enhance our products on a timely basis could diminish our ability to attract and retain customers. ● Our products have a lengthy sales cycle, which makes it difficult to predict success in this market and the timing of future revenue. ● The semiconductor industry is cyclical in nature and subject to periodic downturns, which can negatively affect our revenue. ● Our revenue has been highly concentrated among a small number of customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it. ● Our revenue concentration may also pose credit risks which could negatively affect our cash flow and financial condition. ● Our products must meet exact specifications and defects and failures may occur, which may cause customers to return or stop buying our products. ● Because we sell our products on a purchase order basis and rely on estimated forecasts of our customers’ needs, inaccurate forecasts could adversely affect our business. ● We rely on independent foundries and contractors for the manufacture, assembly, testing and packaging of our integrated circuits and modules, and the failure of any of these third parties to deliver products or otherwise perform as requested could damage our relationships with our customers and harm our sales and financial results. ● Disruptions in our supply chain due to shortages in the global semiconductor supply chain could cause delays for customers and impact revenue. ● Any claim that our products or technology infringe third party IP rights could increase our costs of operation and distract management and could result in expensive settlement costs or the discontinuance of our technology licensing or product offerings.
The success and profitability, as well as the expansion, of our international operations are subject to numerous risks and uncertainties, many of which are outside of our control, such as the following: ● public health issues, such as pandemics and epidemics, which can result in varying impacts to our business, employees, partners, customers, distributors or suppliers internationally; ● difficulties, inefficiencies and costs associated with staffing and managing foreign operations; ● longer and more difficult customer qualification and credit checks; ● greater difficulty collecting accounts receivable and longer payment cycles; ● the need for various local approvals to operate in some countries; ● difficulties in entering some foreign markets without larger-scale local operations; 20 ● changes in import/export laws, trade restrictions, regulations and customs and duties and tariffs (foreign and domestic); ● compliance with local laws and regulations; ● unexpected changes in regulatory requirements; ● reduced protection for intellectual property rights in some countries; ● adverse tax consequences, including potential additional tax exposure if we are deemed to have established a permanent establishment outside of the United States; ● the effectiveness of our policies and procedures designed to ensure compliance with the Foreign Corrupt Practices Act of 1977 and similar regulations; ● fluctuations in currency exchange rates, which could increase the prices of our products to customers outside of the United States, increase the expenses of our international operations by reducing the purchasing power of the U.S. dollar and expose us to foreign currency exchange rate risk if, in the future, we denominate our international sales in currencies other than the U.S. dollar; ● new and different sources of competition; ● political, economic, and social instability; ● terrorism and acts of war, which could have a negative impact on the operations of our business or the businesses of our customers and vendors; and ● US Department of Commerce regulations or restrictions on exports of certain semiconductor products and technologies.
The success and profitability, as well as the expansion, of our international operations are subject to numerous risks and uncertainties, many of which are outside of our control, such as the following: ● public health issues, such as pandemics and epidemics, which can result in varying impacts to our business, employees, partners, customers, distributors or suppliers internationally; ● difficulties, inefficiencies and costs associated with staffing and managing foreign operations; ● longer and more difficult customer qualification and credit checks; ● greater difficulty collecting accounts receivable and longer payment cycles; ● the need for various local approvals to operate in some countries; ● difficulties in entering some foreign markets without larger-scale local operations; ● changes in import/export laws, trade restrictions, regulations and customs and duties and tariffs (foreign and domestic); ● compliance with local laws and regulations; ● unexpected changes in regulatory requirements; ● reduced protection for intellectual property rights in some countries; ● adverse tax consequences, including potential additional tax exposure if we are deemed to have established a permanent establishment outside of the United States; ● the effectiveness of our policies and procedures designed to ensure compliance with the Foreign Corrupt Practices Act of 1977 and similar regulations; ● fluctuations in currency exchange rates, which could increase the prices of our products to customers outside of the United States, increase the expenses of our international operations by reducing the purchasing power of the U.S. dollar and expose us to foreign currency exchange rate risk if, in the future, we denominate our international sales in currencies other than the U.S. dollar; ● new and different sources of competition; ● political, economic, and social instability; ● terrorism and acts of war, which could have a negative impact on the operations of our business or the businesses of our customers and vendors; and ● US Department of Commerce regulations or restrictions on exports of certain semiconductor products and technologies.
Acquisitions may involve additional risks, including: ● the acquired product lines, technologies or businesses may not improve our financial and strategic position as planned; ● we may determine we have overpaid for the product lines, technologies or businesses, or that the economic conditions underlying our acquisition have changed; ● we may have difficulty integrating the operations and personnel of the acquired company; ● we may have difficulty retaining the employees with the technical skills needed to enhance and provide services with respect to the acquired product lines or technologies; ● the acquisition may be viewed negatively by customers, employees, suppliers, financial markets or investors; ● we may have difficulty incorporating the acquired product lines or technologies with our existing technologies; 23 ● we may encounter a competitive response, including price competition or IP litigation; ● we may become a party to product liability or IP infringement claims as a result of our sale of the acquired company’s products; ● we may incur one-time charges, such as for acquired in-process research and development costs, and restructuring charges; ● we may acquire goodwill and other intangible assets that are subject to impairment tests, which could result in future impairment charges; ● our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises; and ● our due diligence process may fail to identify significant existing issues with the target business.
Acquisitions may involve additional risks, including: ● the acquired product lines, technologies or businesses may not improve our financial and strategic position as planned; ● we may determine we have overpaid for the product lines, technologies or businesses, or that the economic conditions underlying our acquisition have changed; ● we may have difficulty integrating the operations and personnel of the acquired company; ● we may have difficulty retaining the employees with the technical skills needed to enhance and provide services with respect to the acquired product lines or technologies; ● the acquisition may be viewed negatively by customers, employees, suppliers, financial markets or investors; ● we may have difficulty incorporating the acquired product lines or technologies with our existing technologies; ● we may encounter a competitive response, including price competition or IP litigation; ● we may become a party to product liability or IP infringement claims as a result of our sale of the acquired company’s products; ● we may incur one-time charges, such as for acquired in-process research and development costs, and restructuring charges; ● we may acquire goodwill and other intangible assets that are subject to impairment tests, which could result in future impairment charges; ● our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises; and ● our due diligence process may fail to identify significant existing issues with the target business.
Our efforts to increase our revenue and expand our markets have been subject to various risks and uncertainties, including, but not limited to: ● a lack of working capital; ● customer acceptance; ● difficulties and delays in our product development, manufacturing, testing and marketing activities; ● timeliness of new product introductions; ● the anticipated costs and technological risks of developing and bringing our products to market; ● the willingness of our manufacturing partners to assist successfully with fabrication; 15 ● our ability to qualify our products for mass production and achieve wafer yield levels and the final test results necessary to be price competitive; ● the availability of quantities of our products supplied by our manufacturing partners at a competitive cost; ● our ability to generate the desired gross margin percentages and return on our product development investment; ● competition from established competitors; ● the adequacy of our IP protection for our proprietary IC designs and technologies; ● customer concerns over our financial condition and viability to be a long-term profitable supplier; and ● the vigor and growth of markets served by our current and prospective customers.
Our efforts to increase our revenue and expand our markets have been subject to various risks and uncertainties, including, but not limited to: ● a lack of working capital; ● customer acceptance; ● difficulties and delays in our product development, manufacturing, testing and marketing activities; ● timeliness of new product introductions; ● the anticipated costs and technological risks of developing and bringing our products to market; ● the willingness of our manufacturing partners to assist successfully with fabrication; ● our ability to qualify our products for mass production and achieve wafer yield levels and the final test results necessary to be price competitive; ● the availability of quantities of our products supplied by our manufacturing partners at a competitive cost; ● our ability to generate the desired gross margin percentages and return on our product development investment; ● competition from established competitors; ● the adequacy of our IP protection for our proprietary IC designs and technologies; ● customer concerns over our financial condition and viability to be a long-term profitable supplier; and ● the vigor and growth of markets served by our current and prospective customers.
Our lack of capital and uncertainty about our future technology roadmap also may limit our success in achieving additional design wins, as discussed under “ We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs .” The design-win process for our products is generally lengthy, expensive and competitive, with no guarantee of revenue, and, if we fail to generate sufficient revenue to offset our expenses, our business and operating results would suffer.
Our lack of capital and uncertainty about our future technology roadmap also may limit our success in achieving additional design wins, as discussed under “ We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs .” 13 The design-win process for our products is generally lengthy, expensive and competitive, with no guarantee of revenue, and, if we fail to generate sufficient revenue to offset our expenses, our business and operating results would suffer.
We cannot be certain, however, that the waivers or limitations of liability contained in our agreements with customers will be enforceable. 19 We might not be able to protect and enforce our IP rights, which could impair our ability to compete and reduce the value of our technology. Our technology is complex and is intended for use in complex systems.
We cannot be certain, however, that the waivers or limitations of liability contained in our agreements with customers will be enforceable. We might not be able to protect and enforce our IP rights, which could impair our ability to compete and reduce the value of our technology. Our technology is complex and is intended for use in complex systems.
Thus, the future success of our business depends in large part on factors outside our control, and sales of our products may not meet our revenue growth and strategic objectives. Our failure to continue to develop new products and enhance our products on a timely basis could diminish our ability to attract and retain customers.
Thus, the future success of our business depends in large part on factors outside our control, and sales of our products may not meet our revenue growth and strategic objectives. 15 Our failure to continue to develop new products and enhance our products on a timely basis could diminish our ability to attract and retain customers.
In the event of a cancellation or reduction of an order, we may not have enough time to reduce operating expenses to mitigate the effect of the lost revenue on our business. If we overestimate customer demand for our products, we may purchase products from our manufacturers that we cannot sell.
In the event of a cancellation or reduction of an order, we may not have enough time to reduce operating expenses to mitigate the effect of the lost revenue on our business. 17 If we overestimate customer demand for our products, we may purchase products from our manufacturers that we cannot sell.
Our failure to enhance our existing products and develop future products that achieve broad market acceptance will harm our competitive position and impede our future growth. 16 Our products have a lengthy sales cycle, which makes it difficult to predict success in this market and the timing of future revenue.
Our failure to enhance our existing products and develop future products that achieve broad market acceptance will harm our competitive position and impede our future growth. Our products have a lengthy sales cycle, which makes it difficult to predict success in this market and the timing of future revenue.
Our failure to manage any of these risks successfully could harm our operations and reduce our revenue. International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our business, results of operations and financial condition.
Our failure to manage any of these risks successfully could harm our operations and reduce our revenue. 20 International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our business, results of operations and financial condition.
We have recorded a full valuation allowance for our deferred tax assets. Third parties might attempt to gain unauthorized access to our network or seek to compromise our products and services.
We have recorded a full valuation allowance for our deferred tax assets. 21 Third parties might attempt to gain unauthorized access to our network or seek to compromise our products and services.
Under U.S. federal income tax law, we generally can use our NOL carryforwards (and certain related tax credits) to offset ordinary taxable income, thereby reducing our U.S. federal income tax liability, for up to 20 years from the year in which the losses were generated, after which time they will expire.
Under U.S. federal income tax law, we generally can use our NOL carryforwards (and certain related tax credits) to offset ordinary taxable income, thereby reducing our U.S. federal income tax liability, for up to 20 years from the year in which the losses were generated for the years before 2018, after which time they will expire.
As a result of these supply chain disruptions, we have had to increase customer order lead times, and we may be required to purchase some products on allocation. We may be unable to satisfy all of the demand for our products, which may adversely affect customer relationships and impact revenue.
In the past, as a result of these supply chain disruptions, we have had to increase customer order lead times, and we may be required to purchase some products on allocation. We may be unable to satisfy all of the demand for our products, which may adversely affect customer relationships and impact revenue.
Certain of our common stock warrants outstanding at December 31, 2024 are accounted for as liabilities and recorded at fair value with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our common stock.
Certain of our common stock warrants outstanding at December 31, 2025 are accounted for as liabilities and recorded at fair value with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our common stock.
Inflation rates in the markets in which we operate have increased and may continue to rise. Inflation over the last two years has led us to experience higher costs, including, among others, labor, wafer and transportation.
Inflation rates in the markets in which we operate have increased and may continue to rise. Inflation in recent years has led us to experience higher costs, including, among others, labor, wafer and transportation.
Risks Related to Our Business, Operations and Industry ● We might not be able to continue as a going concern. ● We discontinued the production of our memory products. ● We have a history of losses, and we will need to raise additional capital. ● Our failure to generate the significant capital necessary or raise additional capital to expand our operations and invest in new products could reduce our ability to compete and could harm our business. ● 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. ● Our failure to successfully market our products could seriously harm our ability to execute our business strategy and may force us to curtail our research and development plans or existing operations. ● Future revenue growth depends on our winning designs with existing and new customers, retaining current customers, and having those customers design our solutions into their product offerings and successfully selling and marketing such products.
Risks Related to Our Business, Operations and Industry ● We might not be able to continue as a going concern. ● We discontinued the production of our memory products. ● We have a history of losses, and we will need to raise additional capital. ● Our failure to generate the significant capital necessary or raise additional capital to expand our operations and invest in new products could reduce our ability to compete and could harm our business. ● Our failure to successfully market our products could seriously harm our ability to execute our business strategy and may force us to curtail our research and development plans or existing operations. ● Future revenue growth depends on our winning designs with existing and new customers, retaining current customers, and having those customers design our solutions into their product offerings and successfully selling and marketing such products.
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.
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.
During the years ended December 31, 2024 and 2023, we recorded inventory write-downs of approximately $0.4 million and $3.5 million, respectively. We have a history of losses, and we will need to raise additional capital.
During the years ended December 31, 2025 and 2024, we recorded inventory write-downs of approximately $36,000 and $0.4 million, respectively. We have a history of losses, and we will need to raise additional capital.
The sale of our common stock resulting from the exercise of any options or vesting of restricted stock units granted to executive officers and other employees under our equity compensation plan and the exercise of any warrants, and other issuances of our common stock could have an adverse effect on the market price of the shares of our common stock.
In addition, issuances of our common stock resulting from the exercise of options or vesting of restricted stock units granted under our equity compensation plan and the exercise of any warrants, and other issuances of our common stock could have an adverse effect on the market price of the shares of our common stock.
The semiconductor industry is characterized by vigorous protection and pursuit of IP rights or positions which has resulted in often protracted and expensive litigation. We are not aware of any third party IP that our products or technology would infringe.
In addition, we may incur substantial litigation expense which would adversely affect our profitability. The semiconductor industry is characterized by vigorous protection and pursuit of IP rights or positions which has resulted in often protracted and expensive litigation. We are not aware of any third party IP that our products or technology would infringe.
We incurred net losses of approximately $10.7 million and $16.8 million for the years ended December 31, 2024 and 2023, respectively, and we had an accumulated deficit of approximately $177.1 million as of December 31, 2024. These and prior-year losses have resulted in significant negative cash flows.
We incurred net losses of approximately $4.8 million and $10.7 million for the years ended December 31, 2025 and 2024, respectively, and we had an accumulated deficit of approximately $181.9 million as of December 31, 2025. These and prior-year losses have resulted in significant negative cash flows.
As we were not in a position to transition wafer production to a new foundry and continue to manufacture these products, we initiated an end-of-life, or EOL, of our memory IC products in 2023, and ceased production of these products in 2024.
As we were not in a position to transition wafer production to a new foundry and continue to manufacture these products, we initiated an end-of-life, or EOL, of our memory IC products in 2023, and ceased production of these products in 2024. As of December 31, 2025, we had no remaining EOL purchase orders from customers.
Disruptions in our supply chain due to shortages in the global semiconductor supply chain could cause delays for customers and impact revenue. We have and may continue to experience disruptions in our global semiconductor supply chain, with suppliers increasing lead times or placing products on allocation, including procuring necessary components, wafers, substrates and assembly services in a timely fashion.
We have experienced and may in the future experience disruptions in our global semiconductor supply chain, with suppliers increasing lead times or placing products on allocation, including procuring necessary components, wafers, substrates and assembly services in a timely fashion.
Historically, the stock market, as well as our common stock, has experienced significant price and volume fluctuations. Market prices of securities of technology companies can be highly volatile and frequently reach levels that bear no relationship to the operating performance of such companies. These market prices generally are not sustainable and are subject to wide variations.
Market prices of securities of technology companies can be highly volatile and frequently reach levels that bear no relationship to the operating performance of such companies. These market prices generally are not sustainable and are subject to wide variations.
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. 26 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.
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.
We expect that we will recognize non-cash gains or losses on our warrants or any other similar derivative instruments in each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.
We expect that we will recognize non-cash gains or losses on our warrants or any other similar derivative instruments in each reporting period and that the amount of such gains or losses could be material.
Further, retaliatory acts by foreign governments or terrorist organizations in response to policies of the United States government could include cyber attacks that could disrupt the economy more generally or that could also impact our operations directly or indirectly. 22 Any failure or perceived failure by us or our service providers to prevent information security breaches or other incidents or system disruptions, or any compromise of security that results in or is perceived or reported to result in unauthorized access to, or loss, theft, alteration, release or transfer of, our information, or any personal information, confidential information, or other data could result in loss or theft of proprietary or sensitive data and intellectual property, could harm our reputation and competitive position and could expose us to legal claims, regulatory investigations and proceedings, and fines, penalties, and other liability.
Any failure or perceived failure by us or our service providers to prevent information security breaches or other incidents or system disruptions, or any compromise of security that results in or is perceived or reported to result in unauthorized access to, or loss, theft, alteration, release or transfer of, our information, or any personal information, confidential information, or other data could result in loss or theft of proprietary or sensitive data and intellectual property, could harm our reputation and competitive position and could expose us to legal claims, regulatory investigations and proceedings, and fines, penalties, and other liability.
We generally have not entered into employment or non-competition agreements with any of our employees and do not maintain key-man life insurance on the lives of any of our key personnel. We currently maintain and may expand operations outside of the United States, which exposes us to significant risks.
We generally have not entered into employment or non-competition agreements with any of our employees and do not maintain key-man life insurance on the lives of any of our key personnel.
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. 12 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.
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. 12 Our failure to successfully market our products could seriously harm our ability to execute our business strategy and may force us to curtail our research and development plans or existing operations.
As a result, our business has been in the past and could be adversely affected in the future by an industry downturn which could negatively impact our future revenue and profitability. Also, the cyclical nature of the semiconductor industry may cause our operating results to fluctuate significantly from year-to-year.
As a result, our business has been in the past and could be adversely affected in the future by an industry downturn which could negatively impact our future revenue and profitability.
Our customers generally establish demanding specifications for quality, performance and reliability that our products must meet. However, our products are highly complex and may contain defects and failures when they are first introduced or as new versions are released.
However, our products are highly complex and may contain defects and failures when they are first introduced or as new versions are released.
If we are unable to satisfy the continued listing requirements of the 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.
Our common stock may lose value and could be delisted from Nasdaq due to several factors or a combination of such factors.
Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.
Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations and growth prospects. Provisions of our certificate of incorporation and bylaws or Delaware law might delay or prevent a change-of-control transaction and depress the market price of our stock.
Taiwan Semiconductor Manufacturing Corporation, or TSMC, is the sole foundry that manufactures the wafers used to produce our memory IC products. TSMC informed us that it would be discontinuing the foundry process used to produce the wafers necessary to produce our memory ICs.
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.
The delays inherent in our protracted sales cycle increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans, causing us to lose anticipated revenue.
The delays inherent in our protracted sales cycle increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans, causing us to lose anticipated revenue. In addition, any change, delay or cancellation of a customer’s plans could harm our financial results, as we may have incurred significant expense while generating no revenue.
In addition, if we seek additional financing, including through the sale of equity or convertible securities, such sales could cause our stock price to decline and result in dilution to existing stockholders.
In addition, if we seek additional financing, including through the sale of equity or convertible securities, such sales could cause our stock price to decline and result in dilution to existing stockholders. 24 In addition, the stock markets in general, and the markets for semiconductor stocks in particular, have experienced significant volatility that has often been unrelated to the financial condition or results of operations of particular companies.
Any claim that our products or technology infringe third party IP rights could increase our costs of operation and distract management and could result in expensive settlement costs or the discontinuance of our technology licensing or product offerings. In addition, we may incur substantial litigation expense which would adversely affect our profitability.
If we are unable to increase the price of our products to our customers in response to increased costs, we would face reduced margins. 18 Any claim that our products or technology infringe third party IP rights could increase our costs of operation and distract management and could result in expensive settlement costs or the discontinuance of our technology licensing or product offerings.
For the years ended December 31, 2024 and 2023, our three largest customers represented approximately 86% and 75% of our total revenue, respectively. We expect that a relatively small number of customers will continue to account for a substantial portion of our revenue for the foreseeable future.
We expect that a relatively small number of customers will continue to account for a substantial portion of our revenue for the foreseeable future.
Accordingly, our stockholders bear the risk that our future offerings will reduce the market price of our common stock and dilute their stock holdings in us. 24 Potential volatility of the price of our common stock could negatively affect your investment. We cannot assure you that there will continue to be an active trading market for our common stock.
Potential volatility of the price of our common stock could negatively affect your investment. We cannot assure you that there will continue to be an active trading market for our common stock. Historically, the stock market, as well as our common stock, has experienced significant price and volume fluctuations.
Further, we cannot assure that any limitations of liability provisions in our current or future contracts that may be applicable would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or other security-related matter.
Moreover, we could be required or otherwise find it appropriate to expend significant capital and other resources to respond to, notify third parties of, and otherwise address the incident or breach and its root cause, and to notify individuals, regulatory authorities and others of security breaches involving certain types of data. 22 Further, we cannot assure that any limitations of liability provisions in our current or future contracts that may be applicable would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or other security-related matter.
Any problems with our manufacturing supply chain could adversely impact our ability to ship our products to our customers on time and in the quantity required which in turn could damage our customer relationships and impede market acceptance of our IC products. 18 Our third-party wafer foundry and testing and assembly vendors are located in regions at high risk for earthquakes and other natural disasters and adverse consequences related to the outbreak of contagious diseases, such as COVID-19.
Our third-party wafer foundry and testing and assembly vendors are located in regions at high risk for earthquakes and other natural disasters and adverse consequences related to the outbreak of contagious diseases, such as COVID-19.
War, terrorism, other acts of violence, natural disasters and global pandemics, such as the COVID-19 pandemic and associated macroeconomic pressures in the markets in could adversely impact our business. Geopolitical issues around the world can impact macroeconomic conditions and could have a material adverse impact on our business.
These negotiations could result in significant diversion of management time, as well as substantial out-of-pocket costs, any of which could have a material adverse effect on our business, operating results and financial condition. 23 War, terrorism, other acts of violence, natural disasters and global pandemics, such as the COVID-19 pandemic and associated macroeconomic pressures in the markets in could adversely impact our business.
Our revenue has been highly concentrated among a small number of customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it. Our overall revenue has been highly concentrated, with a few customers accounting for a significant percentage of our total revenue.
Also, the cyclical nature of the semiconductor industry may cause our operating results to fluctuate significantly from year-to-year. 16 Our revenue has been highly concentrated among a small number of customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it.
Our consolidated financial statements as of December 31, 2024 have been prepared under the assumption that we will continue as a going concern for the next twelve months. As of December 31, 2024, we had cash and cash equivalents of $3.3 million and an accumulated deficit of $177.1 million.
Risks Related to Our Business, Operations and Industry We might not be able to continue as a going concern. Our consolidated financial statements as of December 31, 2025 have been prepared under the assumption that we will continue as a going concern for the next twelve months.
Historically, this development effort required that we add headcount and design resources, such as expensive software tools, which increased our losses from, and cash used in, operations.
Our primary goal has been to increase our total available market by creating high-performance ICs and modules for mmWave applications using our proprietary technology and design expertise. Historically, this development effort required that we add headcount and design resources, such as expensive software tools, which increased our losses from, and cash used in, operations.
For instance, world unrest due to wars, terrorist attacks and other disruptive events, such as the COVID-19 pandemic, have led to global economic disruptions, and mounting inflationary cost pressures and recessionary fears have negatively impacted the global and domestic economy. Since mid-2022, the U.S. Federal Reserve has addressed elevated inflation by periodically increasing interest rates.
Geopolitical issues around the world can impact macroeconomic conditions and could have a material adverse impact on our business. For instance, world unrest due to wars, terrorist attacks and other disruptive events, such as the COVID-19 pandemic, have led to global economic disruptions, and mounting inflationary cost pressures and recessionary fears have negatively impacted the global and domestic economy.
In addition, any change, delay or cancellation of a customer’s plans could harm our financial results, as we may have incurred significant expense while generating no revenue. 14 If our foundries do not achieve satisfactory yields or quality, our cost of net revenue will increase, our operating margins will decline and our reputation and customer relationships could be harmed.
If our foundries do not achieve satisfactory yields or quality, our cost of net revenue will increase, our operating margins will decline and our reputation and customer relationships could be harmed.
Our failure to collect receivables from any customer, which represents a large percentage of receivables, on a timely basis, or at all, could adversely affect our cash flow or results of operations. 17 Our products must meet exact specifications and defects and failures may occur, which may cause customers to return or stop buying our products.
At December 31, 2025, two customers represented approximately 93% of total trade receivables and at December 31, 2024, three customers represented approximately 91% of total trade receivables. Our failure to collect receivables from any customer, which represents a large percentage of receivables, on a timely basis, or at all, could adversely affect our cash flow or results of operations.
We believe that our existing cash and cash equivalents will enable us to meet our capital needs through at least the second quarter of 2025. 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.
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 are not in a position to transition wafer production to a new foundry and continue to manufacture these products. As a result, we initiated an EOL of our memory IC products. The discontinuation of the production and sale of our memory IC products will negatively impact our future revenues, results of operations and cash flows.
The discontinuation of the production and sale of our memory IC products will negatively impact our future revenues, results of operations and cash flows. 14 To date, we have not achieved the anticipated benefits of conducting business as a fabless semiconductor company.
In some cases, our customer agreements only allow us to adjust pricing on an annual basis. If we are unable to increase the price of our products to our customers in response to increased costs, we would face reduced margins.
In some cases, our customer agreements only allow us to adjust pricing on an annual basis.
As discussed under “ We discontinued the production of our memory products ,” TSMC, which is the sole foundry that manufactures the wafers used to produce our memory IC products, informed us that it will be discontinuing the foundry process used to produce the wafers necessary to produce our memory ICs.
As discussed under “ We discontinued the production of our memory products ,” TSMC, the sole foundry that manufactured the wafers used to produce our memory IC products, discontinued the foundry process used to produce such wafers. We were not in a position to transition wafer production to a new foundry and continue to manufacture these products.
As of December 31, 2024, we had remaining EOL purchase orders from customers totaling approximately $2.3 million, and we expect to ship all of these orders by March 2025. We do not expect any further shipments or to generate any meaningful revenue from shipments of our memory IC products after March 2025.
As a result, we initiated an EOL of our memory IC products. We do not expect to generate any meaningful revenue from shipments of our memory IC products after December 2025.
Any of the above factors could impact our supply chain, as well as our operations and business, and adversely affect our results of operations and financial condition. 21 Our ability to utilize our net operating loss carryforwards is limited as a result of an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended.
Our ability to utilize our net operating loss carryforwards is limited as a result of an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended. As of December 31, 2025, we had approximately $214 million of net operating loss, or NOL, carryforwards for U.S. federal tax purposes.
For the years ended December 31, 2024 and 2023, our memory IC products represented over 85% and 60% of our revenues, respectively.
We do not expect to generate any meaningful revenue from shipments of our memory IC products after December 2025. For the years ended December 31, 2025 and 2024, our memory IC products represented approximately 22% and 89% of our revenues, respectively.
From time to time, we may enter into negotiations for acquisitions or investments that are not ultimately consummated. These negotiations could result in significant diversion of management time, as well as substantial out-of-pocket costs, any of which could have a material adverse effect on our business, operating results and financial condition.
From time to time, we may enter into negotiations for acquisitions or investments that are not ultimately consummated.
Removed
Risks Related to Our Securities ● There may be future sales of our common stock, which could adversely affect the market price of our common stock and dilute a stockholder’s ownership of common stock. ● Provisions of our certificate of incorporation and bylaws or Delaware law might delay or prevent a change-of-control transaction and depress the market price of our stock. ● If we are unable to satisfy the continued listing requirements of the Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected. 10 Risks Related to Our Business, Operations and Industry We might not be able to continue as a going concern.
Added
As of December 31, 2025, we had cash and cash equivalents of $2.9 million and an accumulated deficit of $181.9 million. We believe that our existing cash and cash equivalents and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the third quarter of 2026.
Removed
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.
Added
As a result, management has concluded, and our independent registered public accounting firm has agreed with our conclusion that there is substantial doubt regarding our ability to continue as a going concern for a period of at least 12 months beyond the filing of this Annual Report on Form 10-K.
Removed
In 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.
Added
Adverse market conditions, volatility in the capital markets, declines in our stock price, changes in investor sentiment, interest rate increases, or factors specific to our business or industry could impair our ability to raise capital on terms favorable to us or at all.
Removed
As a result, we recorded severance charges of approximately $0.4 million during the year ended December 31, 2024, and, as of December 31, 2024, we had a remaining liability for severance costs of approximately $0.1 million. The accrued severance costs are expected to be paid through October 2025.
Added
In addition, so long as our public float remains below $75 million, we are subject to the “baby shelf” limitations under General Instruction I.B.6 of Form S-3, which restricts the amount of securities we may sell under a shelf registration statement in any 12-month period to one-third of our public float.
Removed
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.
Added
This limitation may constrain the amount of capital we can raise through our “at the market” offering program or through registered shelf offerings and may require us to rely on alternative, potentially more costly or time-consuming offering structures, such as registration statements on Form S-1.
Removed
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. As of December 31, 2024, we had a remaining liability of approximately $1.1 million, and we expect to pay these license fees through September 30, 2025.
Added
Our overall revenue has been highly concentrated, with a few customers accounting for a significant percentage of our total revenue. For the year ended December 31, 2025 our five largest customers represented approximately 80% of our total revenue. For the year ended December 31, 2024 our two largest customers represented approximately 86% of our total revenue.
Removed
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.
Added
Our products must meet exact specifications and defects and failures may occur, which may cause customers to return or stop buying our products. Our customers generally establish demanding specifications for quality, performance and reliability that our products must meet.
Removed
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.
Added
Any problems with our manufacturing supply chain could adversely impact our ability to ship our products to our customers on time and in the quantity required which in turn could damage our customer relationships and impede market acceptance of our IC products.
Removed
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.
Added
Disruptions in our supply chain due to shortages in the global semiconductor supply chain could cause delays for customers and impact revenue.
Removed
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.
Added
Our evaluation of strategic alternatives, including Mobix Labs’ proposal, may not result in a transaction or increased value for our stockholders and could create business disruption and stock price volatility.
Removed
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.
Added
As described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we are evaluating a non-binding acquisition proposal from Mobix Labs as part of our ongoing exploration of strategic alternatives.
Removed
Failure to comply with laws relating to employment could subject us to penalties and other adverse consequences. We are subject to various employment-related laws in the jurisdictions in which our employees are based.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Report on Form 10-K, including the risk factors entitled “Third parties might attempt to gain unauthorized access to our network or seek to compromise our products and services.” 28 Governance A role of our board of directors is informed oversight of our risk management process, including risks from cybersecurity threats.
Biggest changeFor additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Report on Form 10-K, including the risk factors entitled “Third parties might attempt to gain unauthorized access to our network or seek to compromise our products and services.” Governance A role of our board of directors is informed oversight of our risk management process, including risks from cybersecurity threats.
Our board of directors receives periodic reports from management and its designees concerning our significant cybersecurity threats and risks, and the processes we plan to implement and/or have implemented to address them.
Our board of directors receives periodic reports from management and its designees concerning our significant cybersecurity threats and risks, and the processes we plan to implement and/or have implemented to address them. 27

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 2. Properties. We currently maintain leased facilities for our administrative, sales, marketing, support and research and development functions. We believe that our existing facilities are adequate to meet our current needs. The table below summarizes our leased facilities. Location Square Footage (approximate) Lease Expiration Markham, Ontario, Canada 9,500 September 2027 Toronto, Ontario, Canada 6,535 December 2024
Biggest changeItem 2. Properties. We currently maintain leased facilities for our administrative, sales, marketing, support and research and development functions. We believe that our existing facilities are adequate to meet our current needs. The table below summarizes our leased facilities. Location Square Footage (approximate) Lease Expiration Markham, Ontario, Canada 9,500 September 2027 Toronto, Ontario, Canada 6,535 December 2026

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+3 added−0 removed4 unchanged
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers We had no share repurchase activity for the three months ended December 31, 2024. Recent Sale of Unregistered Securities and Use of Proceeds None.
Biggest changeSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 29 Purchases of Equity Securities by the Issuer and Affiliated Purchasers We had no share repurchase activity for the three months ended December 31, 2025.
Market Information for Common Stock Our common stock is currently listed on the Nasdaq Stock Market under the symbol “PRSO.” Holders of Record As of December 31, 2024, there were 83 holders of record of our common stock and 50 holders of record of our exchangeable shares.
Market Information for Common Stock Our common stock is currently listed on the Nasdaq Stock Market under the symbol “PRSO.” Holders of Record As of December 31, 2025, there were 44 holders of record of our common stock and 47 holders of record of our exchangeable shares.
Any future determination as to the payment of cash dividends on our common stock will be at the discretion of our board of directors. Securities Authorized for Issuance under Equity Compensation Plan For information regarding securities authorized for issuance under equity compensation plans, please refer to Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Any future determination as to the payment of cash dividends on our common stock will be at the discretion of our board of directors. Securities Authorized for Issuance under Equity Compensation Plan For information regarding securities authorized for issuance under equity compensation plans, please refer to Item 12.
Added
Recent Sale of Unregistered Securities and Use of Proceeds Except as disclosed below, during the period covered by this Annual Report on Form 10-K, we have not sold any equity securities that were not registered under the Securities Act that were not previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Added
On December 8, 2025, we issued 50,000 unregistered shares of common stock with a fair value of approximately $50,000 to a service provider as compensation.
Added
The shares were issued in reliance on an exemption from registration provided by Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act because the issuance did not involve a public offering, the service provider took the securities for investment and not resale, we took appropriate measures to restrict transfer, and the service provider is a sophisticated investor.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

52 edited+38 added−24 removed34 unchanged
Biggest changeWe expense R&D costs as they are incurred. The decrease for 2024 compared with 2023 was primarily due to reduced salary and consulting costs. During 2023 and 2024 we implemented workforce reductions, as well as targeted reductions in certain longer-term research and development projects.
Biggest changeThe decrease for 2025 compared with 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 2024, we accrued the value of certain of our software license obligations and certain other licenses expired in the second half of 2025.
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 has 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; ● fabrication costs, including mask costs, of any new ICs that we develop; ● 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.
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 has 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; 37 ● 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; ● fabrication costs, including mask costs, of any new ICs that we develop; ● 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.
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 these consolidated financial statements.
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 consolidated financial statements.
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 Our contract liabilities consist of advance customer payments and deferred revenue.
Revenue is recognized using an output method that is consistent with the satisfaction of the performance obligation as a measure of progress. 33 Contract liabilities - deferred revenue Our contract liabilities consist of advance customer payments and deferred revenue.
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 Consolidated Financial Statements” as of and for the years ended December 31, 2024 and 2023 included elsewhere in this Report.
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 Consolidated Financial Statements” as of and for the years ended December 31, 2025 and 2024 included elsewhere in this Report.
We recognize License fee as revenue at the point of time when the control of the license has been transferred and we have 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.
We recognize license fees as revenue at the point of time when the control of the license has been transferred and we have 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.
As of December 31, 2024, there have been no material changes to our significant accounting policies and estimates. Revenue Recognition We recognize revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers, and its amendments (ASC 606).
As of December 31, 2025, there have been no material changes to our significant accounting policies and estimates. Revenue Recognition We recognize revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers, and its amendments (ASC 606).
We 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 Our licensing contracts typically provide for royalties based on the licensee’s use of our memory technology in its currently shipping commercial products.
We 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 Historically, our licensing contracts for our memory technology typically provided for royalties based on the licensee’s use of our memory technology in its currently shipping commercial products.
Severance and Software License Obligations Years Ended December 31, Year-Over-Year Change 2024 2023 2023 to 2024 (dollar amounts in thousands) Severance and software license obligations $ 2,063 $ - $ 2,063 0 % Percentage of total net revenue 14 % 0 % 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.
Severance and Software License Obligations Years Ended December 31, Year-Over-Year Change 2025 2024 2024 to 2025 (dollar amounts in thousands) Severance and software license obligations $ (223 ) $ 2,063 $ (2,286 ) (111 )% Percentage of total net revenue -2 % 14 % 36 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.
With our module, we can guarantee the performance of the amplifier/antenna interface and simplify customers’ radio frequency (“RF”) engineering, facilitating more opportunities for customer prospects that have not provided RF-type systems, as well as shortening the time to market for new products. We also had a memory product line comprising our Bandwidth Engine IC products.
Our module is designed to enhance the performance of the amplifier/antenna interface and simplify customers’ radio frequency (“RF”) engineering, facilitating more opportunities for customer prospects that have not provided RF-type systems, as well as shortening the time to market for new products. We also had a memory product line comprising our Bandwidth Engine IC products.
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. 33 Product revenue Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied.
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.
Years Ended December 31, Year-Over-Year Change 2024 2023 2023 to 2024 (dollar amounts in thousands) Royalty and other $ 325 $ 896 $ (571 ) (64 )% Percentage of total net revenue 2 % 7 % Royalty and other revenue includes royalty, non-recurring engineering services and license revenues.
Years Ended December 31, Year-Over-Year Change 2025 2024 2024 to 2025 (dollar amounts in thousands) Royalty and other $ 348 $ 325 $ 23 7 % Percentage of total net revenue 3 % 2 % Royalty and other revenue includes royalty, non-recurring engineering services and license revenues.
Inc. (“Ladenburg”) with respect to an “at the market” offering program, under which we may, from time to time, in our sole discretion, issue and sell through Ladenburg, acting as agent or principal, shares of our common stock initially having an aggregate offering price of up to $1,425,000.
(“Ladenburg”) with respect to an “at the market” offering program, under which we may, from time to time, in our sole discretion, issue and sell through Ladenburg, acting as agent or principal, shares of our common stock.
Going Concern - Working Capital We incurred net losses of approximately $10.7 million and $16.8 million for the years ended December 31, 2024 and 2023, respectively, and we had an accumulated deficit of approximately $177.1 million as of December 31, 2024.
Going Concern - Working Capital We incurred net losses of approximately $4.8 million and $10.7 million for the years ended December 31, 2025 and 2024, respectively, and we had an accumulated deficit of approximately $181.9 million as of December 31, 2025.
As a result, we recorded severance charges of approximately $0.4 million for the year ended December 31, 2024. 37 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.
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 year ended December 31, 2024, we expensed the value of the remaining contractual liabilities and recorded liabilities of approximately $1.6 million.
Selling, General and Administrative (SG&A) Years Ended December 31, Year-Over-Year Change 2024 2023 2023 to 2024 (dollar amounts in thousands) SG&A $ 8,673 $ 8,505 $ 168 2 % Percentage of total net revenue 60 % 62 % 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.
Selling, General and Administrative Years Ended December 31, Year-Over-Year Change 2025 2024 2024 to 2025 (dollar amounts in thousands) SG&A $ 5,805 $ 8,673 $ (2,868 ) (33 )% Percentage of total net revenue 48 % 60 % 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, prior to January 1, 2025, amortization of intangible assets.
In 2023, net cash provided from investing activities of $1.0 million represented $1.1 million of proceeds from maturities and sales of short-term investments, partially offset by $0.1 million of purchases of fixed assets. 38 In 2024, net cash provided by financing activities of $6.3 million primarily comprised $3.5 million in net proceeds from a public offering of our common stock and common stock purchase warrants in February 2024, $2.6 million in net proceeds from a warrant inducement offering in November 2024, a $0.1 million sale of unregistered stock, and $0.3 million of net proceeds from sales under our at-the market offering program.
In 2024, net cash provided by financing activities of $6.3 million primarily comprised $3.5 million in net proceeds from a public offering of our common stock and common stock purchase warrants in February 2024, $2.6 million in net proceeds from a warrant inducement offering in November 2024, a $0.1 million sale of unregistered stock, and $0.3 million of net proceeds from sales under our at-the market offering program.
The majority of our contracts have a single performance obligation to transfer products. Accordingly, we recognize revenue when title and risk of loss have been transferred to the customer, generally at the time of shipment of products.
Product revenue Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of our contracts have a single performance obligation to transfer products. Accordingly, we recognize revenue when title and risk of loss have been transferred to the customer, generally at the time of shipment of products.
Purchase Obligations Our primary purchase obligations include non-cancelable purchase orders for inventory. At December 31, 2024, the Company had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $3.1 million.
Purchase Obligations Our primary purchase obligations include non-cancelable purchase orders for inventory. At December 31, 2025, we had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $2.7 million.
Cost of Net Revenue and Gross Profit Years Ended December 31, Year-Over-Year Change 2024 2023 2023 to 2024 (dollar amounts in thousands) Cost of net revenue $ 7,040 $ 11,877 $ (4,837 ) (41 )% Percentage of total net revenue 48 % 86 % Cost of net revenue is primarily comprised of direct and indirect costs related to the sale of our products, including amortization of certain intangible assets and depreciation of production-related fixed assets.
Cost of Net Revenue and Gross Profit Years Ended December 31, Year-Over-Year Change 2025 2024 2024 to 2025 (dollar amounts in thousands) Cost of net revenue $ 5,126 $ 7,040 $ (1,914 ) (27 )% Percentage of total net revenue 42 % 48 % 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.
If we are unsuccessful in these efforts, we 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.
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.
In 2023, we used $4.7 million in cash from operating activities, which primarily resulted from our net loss of $16.8 million and changes to operating assets and liabilities of approximately $2.8 million, adjusted for non-cash charges and gains, including stock-based compensation expenses of $5.2 million, depreciation and amortization expenses of $3.8 million, $3.6 million in inventory write-downs and $0.3 million of asset impairment charges, partially offset by a $3.5 million non-cash gain on the change in fair value of warrant liability and $0.1 million of other changes.
In 2025, we used $5.6 million in cash from operating activities, which primarily resulted from our net loss of $4.8 million, adjusted for non-cash charges and gains, including stock-based compensation expenses of $0.5 million, depreciation and amortization expenses of $0.3 million, shares issued for services of $0.1 million and approximately $36,000 in inventory write-downs, partially offset by $1.7 million of changes to operating assets and liabilities.
The net deferred tax assets are reduced by a valuation allowance if, based upon weighted available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
These differences result in deferred tax assets, which we show on our consolidated balance sheet under the category of other assets. The net deferred tax assets are reduced by a valuation allowance if, based upon weighted available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Liquidity and Capital Resources; Changes in Financial Condition At December 31, 2024, we had cash and cash equivalents totaling $3.3 million compared with cash, cash equivalents and investments of $1.6 million as of December 31, 2023.
As of December 31, 2025, the remaining contractual liabilities had been paid. Liquidity and Capital Resources; Changes in Financial Condition At December 31, 2025, we had cash and cash equivalents totaling $2.9 million compared with cash, cash equivalents and investments of $3.3 million as of December 31, 2024.
We classify advance customer payments and deferred revenue as current or non-current based on the timing of when we expect to recognize revenue.
We classify advance customer payments and deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. As of December 31, 2025 and 2024, contract liabilities were in a current position and included in deferred revenue.
We estimate its royalty revenue in the calendar quarter in which the licensee uses the licensed technology. Payments are received in the subsequent quarter. We also generate revenue from licensing its technology.
We estimated royalty revenue in the calendar quarter in which the licensee uses the licensed technology. Payments were received in the subsequent quarter.
We believe that our existing cash and cash equivalents as of December 31, 2024 will enable us to meet our capital needs through at least the second quarter of 2025. 39 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.
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.
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. 31 Recent Developments ATM Offering On August 30, 2024, we entered into an At The Market Offering Agreement (the “Sales Agreement”) with Ladenburg Thalmann & Co.
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.
We expect to continue to incur operating losses during 2025, as we will cease shipments of our memory products after March 2025 and continue to secure new customers for and continue to invest in the development of our products.
We expect to continue to incur operating losses during 2026, as we do not expect to generate any meaningful revenue from shipments of our remaining memory products and as we continue to secure new customers for and continue to invest in the development of our mmWave products.
These and prior year losses have resulted in significant negative cash flows and have required us to raise substantial amounts of additional capital. To date, we have primarily financed our operations through loans, offerings of common stock and warrants and issuances of convertible notes.
These and prior year losses have resulted in significant negative cash flows and have required us to raise substantial amounts of additional capital.
Results of Operations Net Revenue Years Ended December 31, Year-Over-Year Change 2024 2023 2023 to 2024 (dollar amounts in thousands) Product $ 14,248 $ 12,853 $ 1,395 11 % Percentage of total net revenue 98 % 93 % 35 The following table details revenue by product category: (amounts in thousands) Years Ended December 31, Year-Over-Year Product category 2024 2023 change Memory ICs $ 12,914 $ 8,446 4,468 mmWave ICs 302 2,726 (2,424 ) mmWave modules 1,007 1,677 (670 ) mmWave other products 25 4 21 $ 14,248 $ 12,853 $ 1,395 Product revenue increased for 2024 compared with 2023 primarily due to the increase in shipments of our memory IC products due to the EOL we initiated in 2023.
Results of Operations Net Revenue Years Ended December 31, Year-Over-Year Change 2025 2024 2024 to 2025 (dollar amounts in thousands) Product $ 11,845 $ 14,248 $ (2,403 ) (17 )% Percentage of total net revenue 97 % 98 % 34 The following table details revenue by product category: (amounts in thousands) Years Ended December 31, Year-Over-Year Product category 2025 2024 change Memory ICs $ 2,720 $ 12,914 (10,194 ) mmWave ICs 6,734 302 6,432 mmWave modules 2,293 1,007 1,286 mmWave other products 98 25 73 $ 11,845 $ 14,248 $ (2,403 ) Product revenue decreased for 2025 compared with 2024 primarily due to the decrease of our memory IC product shipments attributable to the significant reduction in EOL shipments in 2025 as compared with 2024.
Federal Reserve has addressed elevated inflation by increasing interest rates.
Since mid-2022, at times, the U.S. Federal Reserve has addressed elevated inflation by increasing interest rates.
We have no obligation to sell any shares pursuant to the Sales Agreement and either we or Ladenburg may terminate the Sales Agreement in accordance with its terms. During the three months ended December 31, 2024, we sold 153,200 shares of common stock for net proceeds of approximately $186,500 pursuant to the Sales Agreement.
We have no obligation to sell any shares pursuant to the Sales Agreement and either we or Ladenburg may terminate the Sales Agreement in accordance with its terms.
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. Stock-based compensation We recognize stock-based compensation for equity awards on a straight-line basis over the requisite service period, usually the vesting period, based on the grant-date fair value.
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. Stock-based compensation We periodically issue stock options and restricted stock units (RSUs) to employees and non-employees.
No material amounts related to these indemnifications are reflected in our consolidated financial statements for the years ended December 31, 2024 or 2023. 40 Recent Accounting Pronouncements See Note 1 to the consolidated financial statements in Item 15 of this Report for a description of recent accounting pronouncements.
Recent Accounting Pronouncements See Note 1 to the consolidated financial statements in Item 15 of this Report for a description of recent accounting pronouncements.
Years Ended December 31, Year-Over-Year Change 2024 2023 2023 to 2024 (dollar amounts in thousands) Gross profit $ 7,533 $ 1,872 $ 5,661 302 % Percentage of total net revenue 52 % 14 % Gross profit increased for 2024 compared with 2023 primarily due to product mix, specifically the increase in memory IC shipments and reduction in mmWave product shipments combined with a $3.1 million decrease in inventory write-down charges in 2024 compared with 2023.
The previous write-downs were primarily attributable to inventory identified as excess and obsolete based on inventory expiration and customer forecasts. 35 Years Ended December 31, Year-Over-Year Change 2025 2024 2024 to 2025 (dollar amounts in thousands) Gross profit $ 7,067 $ 7,533 $ (466 ) (6 )% Percentage of total net revenue 58 % 52 % Gross profit decreased for 2025 compared with 2024 primarily due to the reduction in revenue combined with product mix, specifically the decrease in memory IC shipments partially offset by an increase in mmWave product shipments.
This requires us to estimate our actual current tax exposure and to assess temporary differences that result from differing treatment of certain items for tax and accounting purposes. These differences result in deferred tax assets, which we show on our consolidated balance sheet under the category of other assets.
Deferred tax valuation allowance When we prepare our consolidated financial statements, we estimate our income tax liability for each of the various jurisdictions where we conduct business. This requires us to estimate our actual current tax exposure and to assess temporary differences that result from differing treatment of certain items for tax and accounting purposes.
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.
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 our common stock on the date of grant.
During the year ended December 31, 2024, we recorded revenue of approximately $139,000 from inventory that had been written down in prior periods. 36 Research and Development (R&D) Years Ended December 31, Year-Over-Year Change 2024 2023 2023 to 2024 (dollar amounts in thousands) Research and development $ 9,232 $ 14,398 $ (5,166 ) (36 )% Percentage of total net revenue 63 % 105 % Our R&D expenses include costs related to the development of our products.
Research and Development Years Ended December 31, Year-Over-Year Change 2025 2024 2024 to 2025 (dollar amounts in thousands) Research and development $ 6,245 $ 9,232 $ (2,987 ) (32 )% Percentage of total net revenue 51 % 63 % Our research and development, or R&D, expenses include costs related to the development of our products.
We expect sales of our mmWave products to increase from a volume and revenue perspective over the next 12 months, as we expect i) an increase in orders from existing customers, which appear to have reduced inventory levels that had increased due to the worldwide inventory correction and ii) new customers to commence production during 2025.
The decreases were partially offset by an increase in shipments of our mmWave ICs and antenna modules. We expect sales of our mmWave products to increase from a volume and revenue perspective in 2026, as we expect i) an increase in orders from existing customers and ii) new customers to commence production during 2026.
The decrease in royalty and other revenue for 2024 compared with 2023 was due to a decrease in non-recurring engineering services revenue related to our mmWave technology combined with a decrease in royalties from licensees of our memory technology, which were impacted by the same factors that produced our EOL.
The increase in royalty and other revenue for 2025 compared with 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 partially offset by a decrease in royalties from licensees of our memory technology due to reduced shipments by these licensees, which we attribute to the discontinuation of the foundry process by TSMC.
Such indemnification clauses may not be subject to maximum loss clauses. We have also entered into indemnification agreements with our officers and directors.
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 consolidated financial statements for the years ended December 31, 2025 or 2024.
As further discussed in Note 10 to the consolidated financial statements, in November 2024, we entered into a warrant inducement offering for net proceeds of approximately $2.6 million.
These efforts may include, but are not limited to, reducing headcount and curtailing business activities. 38 As further discussed in Note 10 to the 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.
During the quarter ended December 31, 2024, we received net proceeds of approximately $2.6 million from the warrant inducement offering. World Unrest World unrest due to wars and terrorist attacks have led to economic disruptions. Mounting inflationary cost pressures and recessionary fears have negatively impacted the global economy. Since mid-2022, at times, the U.S.
During the three and twelve months ended December 31, 2025, we sold 1,710,732 and 3,713,939 shares of common stock for net proceeds of approximately $2,095,000 and $4,351,100 pursuant to the Sales Agreement World Unrest World unrest due to wars and terrorist attacks have led to economic disruptions. Mounting inflationary cost pressures and recessionary fears have negatively impacted the global economy.
As discussed below, this raises significant doubt about our ability to continue as a going concern.
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.
The increase for 2024 compared with 2023 was primarily attributable to increased consulting and professional services costs and increased amortization of purchased intangible assets for customer relationships, as we reduced the estimated life of these intangibles during 2023.
The decrease for 2025 compared with 2024 was primarily attributable to reductions in expenses for facilities, stock based compensation and amortization of purchased intangible assets for customer relationships of approximately $1.0 million, which were fully amortized as of December 31, 2024. These decreases were partially offset by increases in consulting and professional services costs.
We incurred net losses of approximately $10.7 million and $16.8 million for the years ended December 31, 2024 and 2023, respectively, and we had an accumulated deficit of approximately $177.1 million as of December 31, 2024. These and prior year losses have resulted in significant negative cash flows and historically have required us to raise substantial amounts of additional capital.
Subsequent to March 2025, we received additional purchase orders and recorded revenue totaling approximately $0.5 million during the second half of 2025. 30 We incurred net losses of approximately $4.8 million and $10.7 million for the years ended December 31, 2025 and 2024, respectively, and we had an accumulated deficit of approximately $181.9 million as of December 31, 2025.
The changes in assets and liabilities primarily related to the timing of the collection of receivables from customers, payments to vendors and increases in inventory balances. In 2024, no cash was provided by or used in investing activities.
In 2025, net cash used in investing activities was approximately $107,000 which was attributable to the purchase of fixed assets. In 2024, no cash was provided by or used in investing activities.
Inventory write-down charges declined by $3.1 million from $3.5 million recorded in 2023 to $0.4 million recorded in 2024. The write-downs were primarily attributable to inventory identified as excess and obsolete based on inventory expiration and customer forecasts.
Inventory write-down charges declined by approximately $374,000 from $0.4 million recorded in 2024 to approximately $36,000 recorded in 2025.
These products integrate our proprietary, 1T-SRAM high-density embedded memory and a highly-efficient serial interface protocol resulting in a monolithic memory IC solution optimized for memory bandwidth and transaction access performance. Taiwan Semiconductor Manufacturing Corporation, or TSMC, is the sole foundry that manufactures the wafers used to produce our memory 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.
During the year ended December 31, 2024, we expensed $1.6 million for the value of the remaining contractual liabilities.
As a result, we recorded severance charges of approximately $0.4 million for the year ended December 31, 2024. The severance liabilities were fully paid as of December 31, 2025.
TSMC informed us that it would be discontinuing the foundry process used to produce wafers, in turn, necessary to manufacture our memory ICs. As a result, in May 2023, we initiated an end-of-life, or EOL, of our memory IC products, and we commenced initial EOL shipments during the quarter ended September 30, 2023.
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.
Removed
As of December 31, 2024, we had remaining EOL purchase orders totaling approximately $2.3 million, and we expect to ship all of these orders by March 2025. We do not expect any further shipments or to generate any revenue from shipments of our memory IC products after March 2025.
Added
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.
Removed
After selling $169,215 of shares pursuant to the Sales Agreement, on December 10, 2024, we increased the maximum aggregate offering amount of common stock issuable pursuant to the Sales Agreement to $2,693,527.
Added
(“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.
Removed
The shares of common stock we may issue or sell pursuant to the Sales Agreement are registered under our Registration Statement on Form S-3 (File No. 333-280798), which was declared effective by the SEC on July 22, 2024. We are currently subject to the limitations contained in General Instruction I.B.6 of Form S-3.
Added
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.
Removed
As a result, we are limited to selling no more than one-third of the aggregate market value of the equity held by non-affiliates, or the public float, during any 12-month period.
Added
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.
Removed
If our public float increases, we will have additional availability under such limitations, and if our public float increases to $75 million or more, we will no longer be subject to such limitations. There can be no assurance that our public float will increase or that we will no longer be subject to such limitations.
Added
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”).
Removed
Warrant Inducement Offering On August 6, 2024, we extended the expiration date of our outstanding Series B warrants, which were issued in a public offering completed in February 2024, to October 7, 2024, by entering into an amendment to the Warrant Agency Agreement dated as of February 8, 2024 by and between us and the warrant agent, Equiniti Trust Company, LLC (the Warrant Agency Agreement).
Added
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.
Removed
On October 3, 2024, we extended the expiration date of the Series B warrants to November 8, 2024, by entering into a second amendment to the Warrant Agency Agreement. The Series B warrants would otherwise have expired on October 7, 2024. See Note 10 of the consolidated financial statements for additional information about the Series B warrants and the offering.
Added
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.
Removed
On November 5, 2024, we 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, having an original exercise price of $2.25 per share, issued to the Holders on February 8, 2024 in the offering (see Note 10 of the consolidated financial statements).
Added
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.
Removed
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 (the “Reduced Exercised Price”) for gross proceeds of approximately $2.92 million 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,” and collectively with the Series C Warrants, the “New Warrants”) to purchase an aggregate of 2,246,030 shares of common stock.
Added
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.
Removed
Each New Warrant has an exercise price equal to $1.61 per share, subject to adjustment as provided in the New Warrants. The Series C Warrants were exercisable upon issuance and expire on the six-month anniversary of the date of issuance. The Series D Warrants were exercisable upon issuance and expire on the five-year anniversary of the date of issuance.
Added
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.
Removed
As of December 31, 2024 and 2023, contract liabilities were in a current position and included in deferred revenue. 34 Deferred tax valuation allowance When we prepare our consolidated financial statements, we estimate our income tax liability for each of the various jurisdictions where we conduct business.
Added
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.
Removed
We estimate the value of employee stock options on the date of grant using the Black-Scholes option pricing model. The determination of fair value of share-based payment awards on the date of grant using an option pricing model is affected by our stock price, as well as assumptions regarding a number of highly complex and subjective variables.
Added
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.
Removed
These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The expected volatility is based on the historical volatility of our stock price.
Added
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.
Removed
The increase in memory shipments was partially offset by a decrease in shipments of our mmWave products.
Added
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. 31 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.

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