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Item 1. Business

2024-03-29 compared with 2023-03-29 · 484 added, 400 removed, 43 unchanged (95% of the section changed)

Peraso Inc., together with its subsidiaries (“Peraso,”

the “Company,” “we,” “our” or “us”), is a fabless semiconductor company focused on

the development and sale of:

i) semiconductor devices and millimeter wavelength wireless

technology, or mmWave antenna modules based on its proprietary semiconductor devices and ii) performance of non-recurring engineering,

or NRE, services and licensing of intellectual property, or IP.

Our primary focus is the development of mmWave, which is generally

described as the frequency band from 24 Gigahertz, or GHz, to 300GHz.

Our mmWave products enable a range of applications,

including i) multi-gigabit point-to-point, or PtP, wireless links with a range of up to 25 kilometers and operating in the 60Ghz frequency

band, ii) multi-gigabit point-to-multi-point, or PtMP, links in the 60GHz frequency band used to provide fixed wireless access, or FWA,

services, iii) FWA in the 5G operating bands from 24GHz to 43GHz to provide multi-gigabit capability and low latency connections, and

iv) consumer applications, such as wireless video streaming and untethered augmented reality and virtual reality, or AR/VR.

also have a line of memory-denominated integrated circuits, or ICs, for high-speed cloud networking, communications, security appliance,

video, monitor and test, data center and computing markets that deliver time-to-market, performance, power, area and economic benefits

for system original equipment manufacturers, or OEMs.

We are a fabless semiconductor

company focused on the development and sale of:

i) millimeter wavelength wireless technology, or mmWave, semiconductor devices and antenna

modules based on our proprietary semiconductor devices and ii) performance of non-recurring engineering, or NRE, services and licensing

of intellectual property, or IP.

Our primary focus is the development of mmWave, which is generally described as the frequency band from

24 Gigahertz, or GHz, to 300 GHz.

Our mmWave products enable a range of applications including:

multi-gigabit point-to-point, or PtP,

wireless links with a range of up to 25 kilometers and operating in the 60 GHz frequency band;

multi-gigabit point-to-multi-point, or

PtMP, links in the 60 GHz frequency band used to provide fixed wireless access, or FWA, services;

FWA in the 5G operating bands from 24

GHz to 43 GHz to provide multi-gigabit capability and low latency connections;

military communications;

and consumer applications, such

as high performance wireless video streaming and untethered augmented reality and virtual reality.

We also have a line of memory-denominated

integrated circuits, or ICs, for high-speed cloud networking, communications, security appliance, video, monitor and test, data center

and computing markets that deliver time-to-market, performance, power, area and economic benefits for system original equipment manufacturers,

As discussed below, we initiated an end-of-life of these products in 2023.

Business Combination

We were formerly

known as MoSys, Inc., or MoSys.

were formerly known as MoSys, Inc., or MoSys.

On September 14, 2021, we and our subsidiaries, 2864552 Ontario Inc.

and 2864555 Ontario Inc., entered

into an Arrangement Agreement, or the Arrangement Agreement, with Peraso Technologies Inc., or Peraso Tech, a privately-held corporation

existing under the laws of the province of Ontario, to acquire all of the issued and outstanding common shares of Peraso Tech, or the

Peraso Shares, including those Peraso Shares to be issued in connection with the conversion or exchange of secured convertible debentures

and common share purchase warrants of Peraso Tech, as applicable, by way of a statutory plan of arrangement, or the Arrangement, under

the Business Corporations Act (Ontario).

On December 17, 2021, following the satisfaction of the closing conditions set

forth in the Arrangement Agreement, the Arrangement was completed, and we changed

our name from MoSys to “Peraso Inc.” and began trading on The Nasdaq Stock Market, or the Nasdaq, under the symbol “PRSO.”

Certain previous shareholders of Peraso Tech elected to convert their Peraso Tech common stock into exchangeable shares in 2864555 Ontario

Inc., one of our wholly-owned subsidiaries.

These exchangeable shares, which can be converted into our common stock at the option of the

holder, are similar in substance to our common stock.

and 2864555 Ontario

Inc., entered into an Arrangement Agreement, or the Arrangement Agreement, with Peraso Technologies Inc., or Peraso Tech, a privately-held

corporation existing under the laws of the province of Ontario, to acquire all of the issued and outstanding common shares of Peraso Tech,

or the Peraso Shares, including those Peraso Shares to be issued in connection with the conversion or exchange of secured convertible

debentures and common share purchase warrants of Peraso Tech, as applicable, by way of a statutory plan of arrangement, or the Arrangement,

under the Business Corporations Act (Ontario).

On December 17, 2021, following the satisfaction of the closing conditions set forth in

the Arrangement Agreement, the Arrangement was completed, and we changed our name from MoSys to “Peraso Inc.” and began trading

on The Nasdaq Stock Market, or the Nasdaq, under the symbol “PRSO.” Certain previous shareholders of Peraso Tech elected to

convert their Peraso Tech common stock into exchangeable shares in 2864555 Ontario Inc., one of our wholly-owned subsidiaries.

These exchangeable

shares, which can be converted into our common stock at the option of the holder, are similar in substance to our common stock .

Industry Trends and Market Opportunities

The demand for wireless services is increasing

exponentially, and, as a result, the current low frequency spectrum (under 7GHz) is running out of capacity.

While service providers have

maximized the capacity of the available spectrum, demand continues to outpace supply.

We believe that mmWave spectrum will need to be

MmWave has been standardized for use in both licensed

and unlicensed applications.

In the licensed market, the 3rd Generation Partnership Project, or 3GPP, standards organizations have included

mmWave frequencies in the 5G specification, utilizing the frequency band from 24GHz to 43GHz.

The Institute of Electrical and Electronics

Engineers, or IEEE, has standardized mmWave in the unlicensed band from 57GHz to 71GHz.

We believe mmWave will soon be licensed on the

45GHz band in China.

A primary opportunity for the unlicensed product

line is the FWA market.

This market is primarily driven by wireless Internet service providers, or WISPs, in contrast to the licensed

market, which is primarily serviced by large telecommunications carriers such as AT&T, Verizon and T-Mobile.

Pursuant to the 2022

Fixed Wireless Access and Infrastructure and Devices report issued in September 2022 by

Mobile Experts Inc., the WISP market has been estimated to be 3.2M subscribers in 2023 .

The market is primarily served today

by traditional WiFi technology using the 2.4GHz and 5GHz bands.

From an equipment perspective, this worldwide market is historically serviced

by FWA original equipment manufacturers, or OEMs, such as Ubiquiti Inc., Cambium Networks, Ltd.

Historically, virtually all wireless communications has utilized the

frequency spectrum below 6 GHz.

Primary examples include cell phone communications, WiFi, Bluetooth, Internet of Things, or IoT, and more

recently, broadband internet access or FWA.

In parallel, a broad array of applications continues to push the boundaries of available wireless

network capacity.

These include video streaming services, such as those offered by Netflix, Apple and Amazon, user-generated video content,

such as TikTok and Instagram Reels, and broadly, personal video content generated by personal mobile devices.

While the sub-6 GHz band has traditionally been sufficient for these

services, with growing demand, the industry is migrating towards mmWave spectrum as an additional source of wireless capacity.

spectrum is an extremely valuable commodity and is highly regulated by federal governments around the world.

Spectrum is broadly segmented

into either licensed frequencies or unlicensed frequencies, although most frequencies are licensed.

This holds true for mmWave frequencies

between 24 GHz and 100 GHz.

In the case of mmWave, the 3rd Generation Partnership Project, or 3GPP, has included the spectrum from 24

GHz to 43 GHz in its 5G specification.

This is licensed spectrum in most jurisdictions around the world, and carriers must license this

spectrum if they choose to utilize the mmWave frequency bands within that spectrum.

Alternatively, the spectrum from 57 GHz to 71 GHz

is generally unlicensed around the world, and, therefore, a license is not required to operate in this spectrum.

To that end, the Institute

of Electrical and Electronics Engineers, or IEEE, has established two standards which utilize this unlicensed mmWave spectrum, IEEE 802.11ad

and IEEE 802.11ay.

Peraso has developed silicon products that comply with both the licensed and unlicensed standards.

IEEE 802.11ad/ay:

License-Free mmWave

A primary opportunity for

our mmWave products in unlicensed-band applications is the FWA market.

In this market segment, wireless Internet service providers, or

WISPs, provide their customers with a fixed wireless link to a base station or small cell, thus providing the customer with high-speed

access to the Internet.

mmWave can provide both upload and download speeds of over 1 Gbps.

In addition, we believe mmWave can be a less

expensive alternative to installing fiber and allows FWA carriers a competitive advantage against other access technologies, such as cable

From an equipment perspective, this worldwide market has historically been serviced by FWA OEMs, such as Ubiquiti Inc., or

Ubiquiti, Cambium Networks, Ltd.

and SIA MikroTik.

WISPs are addressing

a segment of the broadband market not served by the traditional carriers, or, in some cases, underserved by the carriers.

has been helped in recent years with the advent of government incentives aimed at closing the so-called ‘digital divide’ between

urban and rural broadband access.

In the United States, such incentive programs include the Regional Digital Opportunity Fund, or RDOF,

the Broadband Equity, Access and Deployment, or BEAD, Program, and the Affordable Connectivity Program.

However, in addition to rural

markets, WISPs have begun offering services in large urban markets in the United States, such as Las Vegas, Los Angeles and Phoenix.

basic business premise is that the 60GHz spectrum is free, and WISPs can pass this cost savings on the customer and compete with more

traditional Internet access services, such as cable broadband or digital subscriber line, or DSL.

There are several other market opportunities

for 60GHz mmWave technology.

Such market opportunities include transportation safety, factory automation, military, and railway communications.

Our 60GHz products can also be applied to consumer

applications, as our technology can provide key advantages to this market.

For example, the data rates of our Versatus antenna module

product is 3Gbps, which is a good fit for high performance, 4K video for VR applications.

Additionally, VR requires very low latency;

Another benefit of 60GHz in the VR market, and in the streaming video market, is low interference.

A primary characteristic

of mmWave technology is the use of beamforming, which focuses the radio frequency, or RF, energy into a narrow beam.

Not only does this

provide improved range, it also provides physical isolation from other transmitters, and leads to reduced interference versus traditional

wireless technology.

Other high performance video applications include streaming, docking, surveillance, and AR.

Considering the licensed 5G market, there are

several primary applications for mmWave.

Our initial target is the FWA segment.

In this market segment, carriers provide their customers

with a fixed wireless link to a base station or small cell, thus providing the customer with high-speed access to the Internet.

can provide download speeds of over 1 Gbps and upload speeds of several hundred megabits per second.

In addition, mmWave is a much cheaper

alternative to installing fiber and allows carriers an additional advantage and competitive advantage against other access technologies,

such as cable broadband.

Additionally, our mmWave antenna modules can be utilized in consumer-premise applications, including hotspots,

laptops and tablets.

5G mmWave has support from major industry players.

Apple has incorporated mmWave wireless into substantially all

versions of the iPhone for sale in the US market.

WISPs are addressing a segment of the broadband market not served by the traditional

carriers, or, in some cases, underserved by the carriers.

The FWA market has been helped

in recent years with the advent of government incentives aimed at closing the so-called ‘digital divide’ between urban and

rural broadband access.

The WISP market is experiencing strong growth.

According to The 2021 Fixed-Wireless and Hybrid ISP Industry

Report prepared by the Carmel Group, the number of subscribers that WISP providers serve in the United States is expected to grow

from 6.9 million at the end of 2020 to 12.7 million by the end of 2025.

Additionally, the U.S.

government has allocated significant support

for the improvement of broadband access to underserved and unserved communities.

In 2020, the U.S.

Federal Communications Commission,

or FCC, established the Rural Digital Opportunity Fund, or RDOF, to award up to $20.4 billion for the development of improved broadband

in rural communities.

In 2023, the U.S.

government established the Broadband Equity, Access, and Deployment, or BEAD, program, which has

allocated $42.45 billion to expand high-speed Internet access by funding planning, infrastructure deployment and adoption programs in

all 50 states.

A related opportunity for

us in the license-free FWA space is dense urban markets, many of which have a high saturation of informal settlements.

As of August 2023,

the World Economic Forum estimates there are over 1.1 billion people living in informal settlements around the world.

Traditional last

mile technology, such as WiFi, is not able to handle to the congestion of users in such communities.

This is because WiFi radio signals

spread out in all directions, much like a bare incandescent light bulb.

Due to the very high population density in informal settlements,

many WiFi transmitters are required, and as such, tend to cancel each other out with overlapping signals.

Because our mmWave technology

utilizes beamforming, the signals are more like beams from a car headlight, very narrow and controlled.

Therefore, in a dense environment,

mmWave is much better at handling high congestion, as the radio signals generally do not overlap.

Another advantage our mmWave technology

provides in the dense urban environment is reduced power consumption.

The power grid in an informal settlement can often be unreliable.

Our technology can operate under 12 watts, which enables communications networks to continue to operate on a backup battery power supply

for several hours.

An additional market for Peraso

60GHz mmWave products is military applications.

Specifically, as a result of our RF beamforming and beamsteering capability, the military

is considering the use of mmWave for stealth tactical communications.

Unlike traditional wireless technology that radiates equally in

all directions (omni), mmWave technology utilizes phased-array RF beams to focus the RF energy into a specific intensity and direction.

The military refers to mmWave as an inherently stealthy protocol – Low Probability of Interception (LPI)/Low Probability of Detection

(LPD)/Anti-Jamming (AJ).

An additional benefit of using the 60GHz spectrum, is since this band is generally unlicensed around the world,

these communications will not interfere with locally licensed spectrum.

Also, as our devices operate at under 12 watts, a light battery

can be used for simple deployment in combat settings.

Further, as our mmWave technology can support gigabit speeds, military personnel

are able to transmit and receive information in a timely manner.

In 2023, we were awarded a proof-of-concept license and technology development

contract to enable mmWave-based communications between soldiers and their vehicle.

Our 60 GHz products can also

be applied to consumer applications, as we believe our technology can provide key advantages to this market.

For example, we are targeting

the high-performance, video-streaming market, specifically the virtual reality, or VR, market.

In its market report, Virtual Reality

Devices, Verticals, and Value Chain – 1Q 2022 , ABI Research estimates a market opportunity of over 6 million VR headsets

by the end of 2025, which we believe translates into a total available market for us in 2025 of approximately $180 million, assuming an

average selling price to us of $30 for an antenna module included in each VR headset.

Uses of VR are envisioned in a broad variety of

markets, including gaming, real estate, healthcare, and transportation.

We believe that our mmWave technology has certain characteristics

that are ideal for VR applications.

First, mmWave’s high data rate of 3 Gbps supports high-resolution displays.

Second, our proprietary

beamforming and beamtracking techniques keep latency to under 5 milliseconds, or ms, so the user does not experience lags in the experience.

Third, mmWave technology is less susceptible to interference and, as mentioned above in the context of dense urban environments, can operate

in highly congested environments, which limits interruptions in the VR user’s experience.

Other market opportunities

for 60 GHz mmWave technology include transportation safety, factory automation, and railway communications.

Licensed mmWave Market

The frequency band from 24

GHz to 43 GHz has been designated as the mmWave band in 5G communications.

In the United States, this band is generally licensed to carriers

by the FCC for expensive license fees that can reach billions of dollars.

Carriers license this spectrum to ensure there is no interference

from other carriers using the same frequencies.

We believe that the primary benefit of mmWave to carriers is the availability of additional

spectrum within the licensed band, to provide additional capacity to handle the growth of mobile users.

In its report, 5G Millimeter

Wave 2023 , Mobile Experts Inc.

predicts that, based on current user growth predictions, U.S.

carriers will saturate the capacity of

their networks using existing spectrum by 2025, and will need to utilize mmWave to provide additional capacity.

Our initial target for

licensed-band applications is the FWA segment, as carriers can utilize the additional network capacity offered by mmWave to provide

FWA services.

According to the Ericsson Mobility Report , as of November 2023, approximately 80% of mobile service providers

have an FWA offering and 121 service providers offer FWA services over 5G, representing 50% of all FWA service providers.

to Mobile Experts Inc.’s report, 5G Millimeter Wave 2023 , mobile operators that have deployed 5G mmWave include

Verizon, T-Mobile, AT&T, NTT DoCoMo, KDDI, Softbank and Rakuten Mobile.

We believe major Chinese mobile carriers have commenced

formal collaborations to advance mmWave solutions in the Chinese telecom market.

Regarding U.S.

carriers, FWA has become a bright

spot for their 5G roll out.

According to Light Reading, fixed wireless services accounted for over 90% of all net broadband customer

additions in the U.S.

carriers currently use the sub 6 GHz frequency band, eventually, as the network gets

saturated, we believe the carriers will commence a broad roll out of mmWave technology.

In terms of FWA market potential in the

U.S., according to Fierce Wireless, T-Mobile is available to over 50 million homes, and Verizon is available to over 40 million

In addition to being used to provide FWA services, our mmWave antenna modules can be utilized in consumer-premises equipment

or CPE, including hotspots, laptops and tablets.

In its report, 5G Millimeter Wave 2023 , Mobile Experts Inc.

total volume of approximately 2 million mmWave-enabled CPE units by 2026.

5G mmWave has support from

major industry players, such as Apple, which has incorporated mmWave wireless into substantially all versions of the iPhone for sale in

The basic premise is the ever-increasing demand for bandwidth.

Verizon is the leading

carrier in the US at deploying mmWave for both mobile and fixed wireless access.

The initial use case for cellular service providers is

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in the total available market.

mmWave is not without challenges, as mmWave signals

do not typically travel as far as traditional wireless signals and are more attenuated by solid objects.

Mitigation strategies must be

deployed, particularly with regard to the management of signal propagation.

Whereas traditional wireless devices utilize a broad, omni-antenna

pattern, mmWave systems rely on phased array technology, which focusses the radio signal into a narrow beam to improve propagation characteristics.

Peraso is a global leader in implementing these sophisticated radio systems and is one of the few companies in the market that is successfully

shipping phased array devices in mass production.

Our memory solutions deliver time-to-market,

performance, power, area and economic benefits for system original equipment manufacturers, or OEMs.

Our primary product line is marketed

under the Accelerator Engine name and comprises our Bandwidth Engine and quad-partition rate SRAM memory ICs, which integrate our proprietary,

Our memory solutions deliver

time-to-market, performance, power, area and economic benefits for system OEMs.

Our Bandwidth Engine memory ICs integrate our proprietary,

1T-SRAM high-density embedded memory and a highly-efficient serial interface protocol resulting in a monolithic memory IC solution optimized

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other custom functions using our optional integrated logic and processor elements.

As data rates and the amount of high-speed processing

increase, critical memory access bottlenecks occur.

Our Accelerator Engine ICs dramatically increase memory accesses per second, removing

these bottlenecks.

In addition, the serial interface and high-memory capacity reduce the board footprint, number of pins and complexity,

while using less power.

Our primary focus is the development, marketing

and sale of our mmWave products.

Currently, there are two industry standards that incorporate mmWave technology for wireless communications:

(i) IEEE 802.11ad/ay and (ii) 3GPP Release 15-17 (commonly referred to as 5G).

We have developed and continue to develop products that

conform to these standards.

As discussed below, we initiated an end-of-life

of these products in 2023.

Our primary focus is the development,

marketing and sale of our mmWave products.

Currently, there are two industry standards that incorporate mmWave

technology for wireless communications:

(i) license-free:

IEEE 802.11ad/ay and (ii) licensed:

3GPP Release 15-17 (commonly referred to

We have developed and continue to develop products that conform to these standards.

To date, we have not sold any 5G products.

Our first mmWave product

line operates in the 60 GHz band and conforms to the IEEE 802.11ad standard.

This product line includes a baseband IC, several variations

of mmWave radio frequency, or RF, ICs, as well as associated antenna technology.

The second product line addresses the 5G mmWave

Given our extensive experience in the development of mmWave technology, 5G mmWave, is a logical adjacent and larger

Our initial target market was the 60GHz IEEE 802.11ad

Our 60GHz IEEE802.11ad products had two very important advantages over traditional 2.4GHz / 5GHz Wi-Fi products:

data rates (up to 4.5 Gigabits per second, or Gb/s) and low latency, i.e., less than 5 milliseconds, or ms.

The first application that

had traction was outdoor broadband, including applications such as point-to-point, or PtP, backhaul links or FWA using point-to-multipoint,

or PtMP, links.

As the spectrum is unlicensed (free), wireless carriers can provide services without having to spend significantly on

wireless spectrum licenses.

These services are offered by WISPs.

The WISP market has seen significant growth over the last six years.

In the United States, the number of subscribers that WISP providers serve has grown from 4 million in 2016 to 6.7 million in 2022 and

could grow to 12.7 million subscribers in 2025, based on The 2021 Fixed-Wireless and Hybrid ISP Industry Report prepared by the

Carmel Group.

Our first mmWave IC product

line operates in the license-free 60 GHz band and conforms to the IEEE 802.11ad standard.

This product line includes a baseband IC, several

variations of mmWave radio frequency, or RF, ICs, and associated antenna technology.

Our 60 GHz IEEE802.11ad products

have two very important advantages over traditional 2.4 GHz / 5 GHz Wi-Fi products:

very high data rates (up to 3.0 Gigabits per second

(“Gbps”)) and low latency, i.e., less than 5 ms.

The first application that had traction was outdoor broadband, including

applications such as PtP backhaul links or FWA using PtMP links.

As the spectrum is unlicensed (free), WISPs can provide services without

having to procure expensive wireless spectrum licenses.

We believe that our mmWave technology can be deployed quickly and cost effectively

in rural and suburban environments, including in remote and low-income regions where residents often have poor Internet quality.

carriers can provide fiber access, the cost of fiber deployment can be prohibitive and trenching for fiber is time consuming and can limit

the rate at which new subscribers are added.

Our mmWave products enable WISPs to deploy broadband service using low-cost terminals and

infrastructure and avoid the costs of deploying cable or fiber.

We are a leading supplier

of semiconductors in the PtP and PtMP markets.

We are currently shipping to leading equipment suppliers in this space, as well as directly

to service providers that are building their own equipment.

of semiconductors in the mmWave PtP and PtMP markets.

We are currently shipping to leading equipment suppliers in this space, as well

as directly to service providers that are building their own equipment.

We believe we bring certain advantages to the market.

First, our products

support the spectrum from 66 GHz to 71GHz.

These are often referred to as channels 5 and 6 in the 802.11ad/ay specifications.

advantage in supporting these channels is that the signals are able to propagate much further than channels 1 through 4;

products support the spectrum from 66 GHz to 71 GHz, which is often referred to as channels 5 and 6 in the 802.11ad/ay specifications.

The key advantage in supporting these channels is that the signals are able to propagate much further than channels 1 through 4;

is a result of significantly lower oxygen absorption at frequencies above 66 GHz.

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Example applications include:

● AR/VR links between the headset and

the video console;

AR/VR links between the headset and the video console;

USB video cameras for corporate video conferencing;

wireless security cameras;

● smart factory safety and

surveillance.

We are a leader in the production of

mmWave devices and have pioneered a high-volume mmWave production test methodology using standard low-cost production test equipment.

It has taken us several years to refine performance of this production test methodology, and we believe this places us in a leadership

position to address the operational challenge of delivering mmWave products into high-volume markets.

smart factory safety and surveillance.

Our mmWave ICs have been in

volume production since 2018.

A core competency of the Company is phased-array technology, or beamforming, in which an array of antenna

elements work in unison to create a focused RF beam.

Through adjustment of the relative phase of the antenna signals, the beams can be

directed to support robust wireless connection.

We are a leader in the production of mmWave devices and have pioneered a high-volume mmWave

production test methodology using standard low-cost production test equipment.

It has taken us several years to refine performance of

this production test methodology, and we believe this places us in a leadership position in addressing operational challenges of delivering

mmWave products into high-volume markets.

Our second product line addresses

the 5G mmWave opportunity.

Given our extensive experience in the development of mmWave technology, 5G mmWave is a logical adjacent and

larger market.

We have commenced sampling a highly integrated 5G mmWave beamformer IC, which operates from the 24 GHz to 43 GHz frequency

The device supports dual-stream multiple input, multiple output, or MIMO, with two 16-channel beamforming arrays.

In June 2023,

we announced a collaboration with pSemi, a Murata company, for the development of a 5G customer premise receiver utilizing our beamformer

IC and pSemi’s up-down converter IC.

The goals of the collaboration are to reduce the number of components and cost of each RF module

to promote faster time to market for more rapid deployment by prospective customers.

mmWave Antenna Modules

In the second half of 2021, we augmented

our business model to produce and sell complete mmWave antenna modules.

The primary advantage provided by our antenna modules is that

our proprietary mmWave ICs and the antenna are integrated into a single device.

A differentiating characteristic of mmWave technology is

that the RF amplifiers must be as close as possible to the antenna to minimize loss.

By providing a module, we can

guarantee the performance of the amplifier/antenna interface and simplify our customer’s RF design engineering,

facilitating more opportunities for new companies that have not provided RF-type systems, as well as shortening the time to market

for new products.

It is possible for third parties to provide competitive module products, but, because we utilize our mmWave ICs

and incorporate our proprietary mmWave antenna IP, we can provide a highly-competitive solution based on our internally-owned and developed

module components.

During 2022, we launched our PERSPECTUS family

of mmWave antenna modules to enable WISPs to offer high-capacity FWA networks in the unlicensed 60-GHz spectrum.

The PERSPECTUS product

family includes a new generation of integrated 60-GHz mmWave antenna modules and enhanced software for PtMP FWA applications.

Our PERSPECTUS

products allow rapid development of low-cost network equipment utilizing over 14 GHz of spectrum to provide multi-gigabit access services.

Leveraging our integrated phased-array antennas and operating in the upper channels of the band, link ranges from 1.5 kilometers up to

extended ranges of 30 kilometers can be achieved using a parabolic reflector.

Accelerator Engines

In the second half of 2021,

we augmented our business model to produce and sell complete mmWave antenna modules for license-free 60 GHz applications.

advantage provided by our antenna modules is that our proprietary mmWave ICs and the antenna are integrated into a single device.

A differentiating

characteristic of mmWave technology is that the RF amplifiers must be as close as possible to the antenna to minimize loss.

With our module,

we can guarantee the performance of the amplifier/antenna interface and simplify customers’ 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.

It is possible

for third parties to provide competitive module products, but, because we utilize our mmWave ICs and incorporate our proprietary mmWave

antenna IP, we can provide a highly-competitive solution based on our internally-owned and developed module components.

During 2022, we launched our

PERSPECTUS family of mmWave antenna modules to enable WISPs to offer high-capacity FWA networks in the unlicensed 60-GHz spectrum.

PERSPECTUS product family includes a new generation of integrated 60 GHz mmWave antenna modules and enhanced software for PtMP FWA applications.

Our PERSPECTUS products allow rapid development of low-cost network equipment utilizing over 14 GHz of spectrum to provide multi-gigabit

access services.

Leveraging our integrated phased-array antennas and operating in the upper channels of the band, link ranges from 1.5

kilometers up to extended ranges of 30 kilometers can be achieved using a parabolic reflector.

Additionally, we have established

an innovative user arbitration protocol called DUNE that is specifically designed to optimize network performance in dense urban environments

using our PERSPECTUS antenna modules.

DUNE is a result of our decade-long experience in mmWave technology and in-house development of

the intellectual property incorporated in media access control, which controls the hardware, the physical layer, which controls the physical

connection and software drivers, as well as novel antenna designs and beamforming algorithms.

DUNE takes a multi-level approach to reducing

contention and interference by incorporating both physical, e.g.

antenna and beamforming, and protocol-level innovations.

Our memory products comprise

our Accelerator Engine ICs, which include our Bandwidth Engine and quad-partition rate SRAM memory ICs.

Bandwidth Engine

The Bandwidth Engine is a

memory-dominated IC that was designed to be a high-performance companion IC to packet processors and is targeted for high-performance

applications where throughput is critical.

While the Bandwidth Engine primarily functions as a memory device with a high-performance and

high-efficiency interface, it also can accelerate certain processing operations by serving as a co-processor element.

Our Bandwidth Engine

(1) our proprietary high-density, high-speed, low latency embedded memory, (2) our high-speed serial interface

technology, or SerDes, (3) an open-standard interface protocol and (4) intelligent access technology.

We believe an IC combining

our 1T-SRAM memory and serial interface with logic and other intelligence functions provides a system-level solution and significantly

improves overall system performance at lower cost, size and power consumption.

Our Bandwidth Engine ICs can provide up to and over 6.5 billion

memory accesses per second externally and 12 billion memory accesses per second internally, which we believe is more than three times

the performance of current memory-based solutions.

They also can enable system designers to significantly narrow the gap between processor

and memory IC performance.

Our customers that design Bandwidth Engine ICs onto the line cards in their systems will re-architect their

systems at the line-card level and use our product to replace traditional memory IC solutions, such as dynamic random access, or DRAM,

and static random access memory, or SRAM, ICs.

When compared with existing commercially available DRAM and SRAM IC solutions, our Bandwidth

Engine ICs may:

● provide up to four times the

● reduce power consumption by

approximately 50%;

● reduce cost by greater than

● result in a dramatic reduction

in IC pin counts on the line card.

Our Bandwidth Engine 2 IC

products contain 576 megabits, or Mb, of memory and use a SerDes interface with up to 16 lanes operating at up to 12.5 Gbps per lane.

We have been shipping our Bandwidth Engine 2 IC products since 2013.

Our Bandwidth Engine 3 IC

products contain 1152 Mb of memory and use a SerDes interface with up to 16 lanes operating at up to 25 Gbps per lane.

Our Bandwidth Engine

3 ICs target support for packet-processing applications with up to five billion memory single word accesses per second, as well as burst

mode to enable full duplex buffering up to 400 Gbps for ingress, egress and oversubscription applications.

The devices provide benefits

of size, power, pin count, and cost savings to our customers.

Our quad partition rate, or

QPR, family of low cost, ultra-high speed SRAM memory devices are optimized for FPGA-based systems.

Our QPR memory technology features

an architecture that allows for parallel accesses to multiple partitions of the memory simultaneously and allows access of up to 576 bits

per read or write cycle.

The QPR device includes four independent partitions per input/output and each partition functions as a stand-alone

random-access SRAM.

The high-performance interface, larger density and the multiple partitions work together to support multiple independent

functional blocks within an FPGA with one QPR device.

Our MSQ220 and MSQ230 QPR devices are ideally suited for random-access applications.

our Bandwidth Engine ICs, which are memory-dominated ICs that were designed to be i) high-performance companion ICs to packet processors

and ii) targeted for high-performance applications where throughput is critical.

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.

TSMC has 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

We notified our customers to provide purchase orders by December 22, 2023, and we commenced initial EOL shipments during

the quarter ended September 30, 2023.

We have requested customers to pay a deposit upon purchase order placement to reserve supply and

provide funding for our required inventory purchases.

In addition, we have requested customers to accelerate payments to improve our cash

Under our EOL plan, we expect shipments of our memory products to continue until at least December 31, 2024.

However, the timing

of EOL shipments will be dependent on receipt of purchase orders from customers, deliveries from our suppliers, and the delivery schedules

requested by our customers.

As of March 1, 2024, we have received EOL purchase orders totaling approximately $14.0 million, of which $3.7

million of these orders were shipped during 2023.

Research and Development

Our ability to compete in the future depends

on successfully improving our technology to meet the increasing demand for higher performance and lower cost solutions.

Development of

new IC products requires specialized chip design and product engineers, expensive computer-aided design software licenses, and significant

fabrication and testing costs, including mask costs.

We have over 14 years of technical know-how in the design and manufacturing

of mmWave technology.

The most important aspect of this knowledge is knowing how mmWave circuits will perform in a real-world environment.

Traditionally, semiconductor design utilizes sophisticated computer-aided design software to simulate the performance of a device that

is manufactured at a specific semiconductor manufacturing plant.

However, mmWave is extremely difficult to model precisely.

the only path to understand how well a device will perform is to produce the device and test it in a real-world application.

last decade, many companies have attempted to develop mmWave semiconductor devices, however, given that the devices had inconsistent or

weak performance, a number of the companies were unsuccessful and abandoned their design and product development efforts.

As an example

of our leadership and expertise in the development of mmWave technology, we were an active participant in the development of the IEEE

802.11ay wireless specification and, to date, have been granted nine essential claims patents with respect to this standard.

At a system level, there are additional technical

challenges presented by mmWave technology that we have overcome and form a key part of our internal know-how.

For example, a key technology

of mmWave is the concept of beamforming and beam steering using a phased array antenna.

This technology is utilized to concentrate the

RF energy into a narrow beam to improve the range and coverage of mmWave devices.

We have developed effective beamforming and beam steering

technology for phased array circuits and antennas.

While there are many academic examples of successful phased array implementations,

there is a vast barrier between a “laboratory” version of phased array technology and a version that is deployed for commercial

One such aspect is the implementation of the beamforming procedure, which seeks to maximize throughput and do so while not impacting

While the details of achieving this are complex, it is important-intellectual property that we have gained through real-world

With regard to our memory products, we do not

have internal resources to develop new, memory IC products, and do not intend to expend any development efforts or funds to develop new

memory products.

That said, we believe our Accelerator Engine IC products will provide us with meaningful revenue and gross margin contributions

through at least the end of 2024.

We intend to continue to devote substantially all of our research and development efforts toward further

expanding our mmWave technology portfolio and expanding our product offerings.

Our ability to compete in

the future depends on successfully improving our technology to meet the increasing demand for higher performance and lower cost solutions.

Development of new IC products requires specialized chip design and product engineers, expensive computer-aided design software licenses,

and significant fabrication and testing costs, including mask costs.

We have over 14 years of technical

know-how in the design and manufacturing of mmWave technology.

The most important aspect of this knowledge is knowing how mmWave circuits

will perform in a real-world environment.

Traditionally, semiconductor design utilizes sophisticated computer-aided design software to

simulate the performance of a device that is manufactured at a specific semiconductor manufacturing plant.

However, mmWave is extremely

difficult to model precisely.

Therefore, the only path to understand how well a device will perform is to produce the device and test

it in a real-world application.

Over the last decade, many companies have attempted to develop mmWave semiconductor devices, however,

given that the devices had inconsistent or weak performance, a number of the companies were unsuccessful and abandoned their design and

product development efforts.

As an example of our leadership and expertise in the development of mmWave technology, we were an active

participant in the development of the IEEE 802.11ay wireless specification and, to date, have been granted nine essential claims patents

with respect to this standard.

At a system level, there are

additional technical challenges presented by mmWave technology that we have overcome and form a key part of our internal know-how.

example, a key technology of mmWave is the concept of beamforming and beam steering using a phased-array antenna.

This technology is utilized

to concentrate the RF energy into a narrow beam to improve the range and coverage of mmWave devices.

We have developed effective beamforming

and beam steering technology for phased-array circuits and antennas.

While there are many academic examples of successful phased-array

implementations, there is a vast barrier between a “laboratory” version of phased-array technology and a version that is deployed

for commercial use.

One such aspect is the implementation of the beamforming procedure, which seeks to maximize throughput and do so while

not impacting latency.

While the details of achieving this are complex, it is important-intellectual property that we have gained through

real-world experience.

mmWave is not without challenges,

as mmWave signals do not typically travel as far as traditional wireless signals and are more attenuated by solid objects.

strategies must be deployed, particularly with regard to the management of signal propagation.

Whereas traditional wireless devices utilize

a broad, omni-antenna pattern, mmWave systems rely on phased-array technology, which focusses the radio signal into a narrow beam to improve

propagation characteristics.

We consider ourselves to be a global leader in implementing these sophisticated radio systems and one of

the few providers in the market successfully shipping phased-array devices in mass production.

While we have developed products

for the 60 GHz and 5G mmWave markets, we believe there are other market opportunities that could utilize mmWave technology.

in the WiFi Alliance there is a pending proposal to utilize mmWave technology in WiFi 8, which is the next generation of WiFi technology.

We believe this proposal is primarily driven by the anticipated use of mmWave to support VR applications, which require very high data

rates, and to reduce congestion in multi-dwelling units.

In the mobile carrier market, there is some early research in the use of terahertz

technology to make even more spectrum available for network capacity.

While the proposed frequencies are higher than mmWave (above 100

GHz), we believe that many of our technological developments, particularly our beamforming and beamsteering concepts, can be applied to

terahertz technology.

With regard to our memory

products, we have ceased and do not intend to expend any development efforts or funds to develop new memory products.

We believe our Bandwidth

Engine IC products will provide us with meaningful revenue and gross margin contributions through at least the end of 2024, as we complete

the EOL of these products.

We intend to continue to devote substantially all of our research and development efforts toward further expanding

our mmWave technology portfolio and expanding our product offerings.

Sales and Marketing

In addition to our direct sales personnel, we

sell through sales representatives and distributors in the United States, Asia and Europe.

Our distributors have a global presence with

offices and technical selling and applications engineering capabilities, which we believe will enable us to reach new potential customers

for our products.

We also have applications engineers who support

our customer engagements and engage with the customers’ system architects and designers to propose and implement our products and

solutions to address system design challenges and improve performance.

In the markets we serve, the time from a design

win to production volume shipments of our IC products can range from 12 to 36 months.

Networking, wireless and wired communication and

security appliance systems can have a product life from a few years to over 10 years once a product like ours has been designed into the

Historically, our revenue has been highly concentrated, with a few customers accounting for a significant percentage of our total

During the year ended December 31, 2022, four

customers accounted for 10% or more of our net revenues, including Nokia Corporation at 26%, WeLink Communications LLC, or WeLink, at

21%, CEAC International Limited, or CEAC, a distributer selling to Ubiquiti Inc., at 16%, and F5, Inc.

In addition to our direct

sales personnel, we sell through sales representatives and distributors in the United States, Asia and Europe.

Our distributors have a

global presence with offices and technical selling and applications engineering capabilities, which we believe will enable us to reach

new potential customers for our products.

We also have applications

engineers who support our customer engagements and engage with the customers’ system architects and designers to propose and implement

our products and solutions to address system design challenges and improve performance.

In the markets we serve, the

time from a design win to production volume shipments of our IC products can range from 12 to 36 months.

We believe that networking, wireless

and wired communication and security appliance systems can have a product life from a few years to over 10 years once a product like ours

has been designed into the system.

Historically, our revenue has been highly concentrated, with a few customers accounting for a significant

percentage of our total revenue.

In the FWA market, our primary

customer base is OEMs, but we also have multiple WISP customers in the U.S.

Our OEM customers in the fixed wireless space

include Ubiquiti, WeLink, which operates as both an OEM and a WISP, Tachyon Networks, or Tachyon, and China Unicom.

Ubiquiti, an OEM in

the unlicensed fixed wireless space, relies on us as its sole source mmWave IC supplier for its “Wave” products, which Ubiquiti

introduced in 2022.

Ubiquiti introduced three new Wave models in 2023.

WeLink has relied on us as its sole source supplier for WeLink

designed equipment used to deliver WISP residential service since 2022.

WeLink currently deploys 60 GHz technology in multiple U.S.

including Las Vegas, Dallas and Los Angeles.

Tachyon utilizes our mmWave antenna modules in its TNA-30X family of PtP and PtMP solutions

for 60 GHz unlicensed FWA networks.

Peraso and Tachyon jointly announced production readiness of the TNA-30X product family in June 2023.

Finally, China Unicom is a Chinese mobile carrier that uses our 60 GHz technology for 5G PtP backhaul.

In addition to OEMs, we have partnered

with several WISPs in the U.S.

and Canada that have deployed our 60 GHz technology, including WeLink.

We continue to focus on securing

new OEM and WISP customers.

During the year ended December

31, 2021, three customers accounted for 10% or more of our net revenues, including CEAC at 48%, WeLink at 19% and Alltek Technology Corp.,

a distributer selling to Ubiquiti Inc., at 11%.

31, 2023, three customers accounted for 10% or more of our net revenues, including Nokia Corporation at 35%, F5/Flextronics at 22% and

Alltek Technology Corp at 18%.

During the year ended December 31, 2022, four customers accounted for 10% or more of our net revenues,

including Nokia Corporation at 26%, WeLink Communications LLC, or WeLink, at 21%, CEAC International Limited, or CEAC, a distributer selling

to Ubiquiti, at 16%, and F5, Inc.

Intellectual Property

We regard our patents, copyrights, trademarks,

trade secrets and similar intellectual property as critical to our success and rely on a combination of patent, trademark, copyright,

and trade secret laws to protect our proprietary rights.

As of December 31, 2022, we held 95 United States

patents and 59 foreign patents on various aspects of our mmWave, antenna, memory and other technology, with expiration dates ranging from

2025 to 2041.

We regard our patents, copyrights,

trademarks, trade secrets and similar intellectual property as critical to our success and rely on a combination of patent, trademark,

As of March 1, 2024, we held

96 United States patents and 67 foreign patents on various aspects of our mmWave, antenna, memory and other technology, with expiration

dates ranging from 2025 to 2041.

We also held 13 pending patent applications in the United States and abroad.

There can be no assurance that others will

not independently develop or patent similar or competing technology or design around any patents that may be issued to us, or that we

will be able to successfully enforce our patents against infringement by others.

We were also an active participant in the development

of the IEEE 802.11ay wireless specification and, to date, have been granted nine essential claims patents with respect to this standard.

Essential claims patents are of particular value as a specification cannot be implemented without obtaining a license to the patents from

The semiconductor industry is characterized by

frequent litigation regarding patent and other intellectual property rights.

Our IC customers, licensees or we might, from time to time,

receive notice of claims that we have infringed patents or other intellectual property rights owned by others.

Our successful protection

of our patents and other intellectual property rights and our ability to make, use, import, offer to sell, and sell products free from

the intellectual property rights of others are subject to a number of factors, particularly those described in Part I, Item 1A, “Risk

mmWave circuit and system design is a highly

specialized engineering skill, as mmWave is a challenging technology to ship in mass production.

At frequencies above 24GHz, circuits

are extremely vulnerable to small variances in the semiconductor manufacturing process.

Designing circuits that minimize susceptibility

to these variances takes years of development, and we believe we are one of the few companies in the world that is skilled in mmWave design.

Further, we have shipped mmWave devices in volume, and ensuring all devices sold adhere to strict performance standards is a core competency

we have developed.

In addition, we have developed our own mmWave phased array antenna technology, which allows us to be highly competitive

in terms of overall system cost.

Our customers do not need to engage with third-party antenna suppliers, thus eliminating the additional

cost for a third-party antenna.

There can be no assurance

that others will not independently develop or patent similar or competing technology or design around any patents that may be issued to

us, or that we will be able to successfully enforce our patents against infringement by others.

We were also an active participant

in the development of the IEEE 802.11ay wireless specification and, to date, have been granted nine essential claims patents with respect

to this standard.

Essential claims patents are of particular value as a specification cannot be implemented without obtaining a license

to the patents from us.

The semiconductor industry

is characterized by frequent litigation regarding patent and other intellectual property rights.

Our IC customers, licensees or we might,

from time to time, receive notice of claims that we have infringed patents or other intellectual property rights owned by others.

successful protection of our patents and other intellectual property rights and our ability to make, use, import, offer to sell, and sell

products free from the intellectual property rights of others are subject to a number of factors, particularly those described in Part

I, Item 1A, “Risk Factors.”

mmWave circuit and system

design is a highly specialized engineering skill, as mmWave is a challenging technology to ship in mass production.

At frequencies above

24 GHz, circuits are extremely vulnerable to small variances in the semiconductor manufacturing process.

Designing circuits that minimize

susceptibility to these variances takes years of development, and we believe we are one of the few companies in the world that is skilled

in mmWave design.

Further, we have shipped mmWave devices in volume, and ensuring all devices sold adhere to strict performance standards

is a core competency we have developed.

In addition, we have developed our own mmWave phased-array antenna technology, which allows us

to be highly competitive in terms of overall system cost.

Our customers do not need to engage with third-party antenna suppliers, thus

eliminating the additional cost for a third-party antenna.

Unlicensed IEEE 802.11ad/ay Market:

Our primary competitor in the IEEE802.11ad/ay

market is Qualcomm.

The primary benefit that we provide to the market is the support of the higher frequency bands from 66GHz to 71GHz.

The advantage at these frequencies is that oxygen attenuation is significantly reduced, and signals can travel much further.

We also have key points of differentiation compared

to Qualcomm for wireless video devices.

We are well positioned in this market, as we have USB 3.0 built into our devices, so our products

generally support USB architectures.

A prime example is the replacement of the USB cable with a wireless version using our technology.

There are many applications where this can be of use, including USB web cams, wireless displays, and AR/VR headsets.

We have invested

significant software resources into providing the market with wireless USB solutions, and we believe there is no other mmWave vendor in

the world that can offer multi-gigabit solutions as a replacement for wired USB.

Our primary competitor in

the IEEE802.11ad/ay market is Qualcomm.

The primary benefit that we provide to the market is the support of the higher frequency bands

from 66 GHz to 71 GHz.

The advantage at these frequencies is that oxygen attenuation is significantly reduced, and signals can travel

much further.

We also have key points of

differentiation compared to Qualcomm for wireless video devices.

We are well positioned in this market, as we have USB 3.0 built into

our devices, so our products generally support USB architectures.

A prime example is the replacement of the USB cable with a wireless

version using our technology.

There are many applications where this can be of use, including USB web cams, wireless displays, and AR/VR

We have invested significant software resources into providing the market with wireless USB solutions, and we believe there

is no other mmWave vendor in the world that can offer multi-gigabit solutions as a replacement for wired USB.

Licensed 5G Market:

With 5G, our efforts are focused on the mmWave

RF front-end phased array component of the system.

The 5G product instantiation is an RF module utilizing our proprietary intellectual

With 5G, our efforts are focused

on the mmWave RF front-end phased-array component of the system.

The 5G product instantiation is an RF module utilizing our proprietary

intellectual property.

Key elements of our mmWave intellectual property include:

● RF circuits;

phased-array antenna;

● in-system circuit calibration, beam forming, real-time system

From a competitive perspective, we believe we

are currently the only pure-play, 5G vendor to offer a dual-band (28/39GHz) RF solution for the FWA market.

Qualcomm does offer a 5G RF

solution for the FWA market, however its solution is based on aggregating its mobile RF solution, which requires several compromises in

terms of cost, performance, and power consumption.

With an initial focus on fixed wireless access, we can derive advantages by optimizing

in-system circuit calibration, beam forming, and real-time system monitoring.

From a competitive perspective,

we believe we are currently the only pure-play, 5G vendor to offer a dual-band (28/39 GHz) RF solution for the FWA market.

Qualcomm does

offer a 5G RF solution for the FWA market, however its solution is based on aggregating its mobile RF solution, which we believe requires

several compromises in terms of cost, performance, and power consumption.

With an initial focus on FWA, we can derive advantages by optimizing

our silicon for that specific market.

Furthermore, we have achieved traction in the unlicensed, 60GHz, FWA market, and we believe we will

be able to transfer all of our knowledge gained from the 60GHz market to the 5G market.

However, this market opportunity is more competitive,

and potential competitors, in addition to Qualcomm, include MediaTek Inc.

and Samsung Electronics Co., Ltd., or Samsung.

The markets for our memory products are highly

We believe that the principal competitive factors are:

processing speed and performance;

density and cost;

power consumption;

interface requirements;

ease with which technology can be customized for and incorporated into customers’ products;

level of technical support provided.

We believe that our products compete favorably

with respect to each of these criteria.

Our proprietary 1T-SRAM embedded memory and high-speed serial interface IP can provide our Accelerator

Engine ICs with a competitive advantage over alternative devices.

Our Accelerator Engine ICs compete with embedded memory solutions, stand-alone

memory ICs, including both DRAM and SRAM ICs, application-specific, or ASICs, designed by customers in-house to meet their system requirements,

and network processing units, or NPUs, that use significant internal memory and customer-designed software to implement tasks.

DRAM solutions primarily include RLDRAM from Micron Technology, Inc., or Micron, LLDRAM from Renesas, DDR from Samsung, Micron and

others, and high-bandwidth memory, or HBM, which is stacked DRAM memory from Samsung and SK Hynix.

SRAM solutions can meet high-speed

performance requirements, but often lack adequate memory size.

Competitive SRAM solutions primarily include QDR or similar SRAM products

from Infineon Technologies AG and GSI Technology, Inc.

Most of the currently available SRAM and DRAM solutions use a parallel, rather

than a serial interface.

To offset these drawbacks, system designers generally must use more discrete memory ICs, resulting in higher

power consumption and greater utilization of space.

Our competitors include established semiconductor companies with significantly

longer operating histories, greater name recognition and reputation, large customer bases, dedicated manufacturing facilities and greater

financial, technical, sales and marketing resources.

This may allow them to respond more quickly than us to new or emerging technologies

or changes in customer requirements.

Generally, customers prefer suppliers with greater financial resources than we have currently.

of our competitors also have significant influence in the semiconductor industry.

They may be able to introduce new technologies or devote

greater resources to the development, marketing and sales of their products than we can.

Furthermore, in the event of a manufacturing

capacity shortage, these competitors may be able to manufacture products when we are unable to do so.

Furthermore, we have achieved traction in the unlicensed, 60 GHz, FWA market, and we believe we

will be able to transfer all of our knowledge gained from the 60 GHz market to the 5G market.

However, this market opportunity is more

competitive, and potential competitors, in addition to Qualcomm, include MediaTek Inc.

and Samsung Electronics Co., Ltd.

Manufacturing

We depend on third-party vendors to manufacture,

package, assemble and test our IC and module products, as we do not own or operate a semiconductor fabrication, packaging or production

testing facility.

By outsourcing manufacturing, we can avoid the high cost associated with owning and operating our own facilities, allowing

us to focus our efforts on the design and marketing of our products.

We perform an ongoing review of our product manufacturing

and testing processes.

Our IC products are subjected to extensive testing to assess whether their performance meets design specifications.

Our test vendors provide us with immediate test data and the ability to generate characterization reports that are made available to our

As of December 31, 2022, we had 73 employees, including 17 located

in the United States and 56 located in Canada.

Our headcount consisted of 54 in research and development and manufacturing operations

and 19 in sales, marketing and general and administrative functions.

In February 2023, we implemented a reduction in our workforce and

eliminated five positions.

We believe our current headcount is adequate to conduct our business.

We depend on third-party vendors

to manufacture, package, assemble and test our IC and module products, as we do not own or operate a semiconductor fabrication, packaging

or production testing facility.

By outsourcing manufacturing, we can avoid the high cost associated with owning and operating our own

facilities, allowing us to focus our efforts on the design and marketing of our products.

We perform an ongoing review

of our product manufacturing and testing processes.

Our IC products are subjected to extensive testing to assess whether their performance

meets design specifications.

Our test vendors provide us with immediate test data and the ability to generate characterization reports

that are made available to our customers.

As of December 31, 2023, we

had 48 employees, including 13 located in the United States and 35 located in Canada.

Our headcount consisted of 34 in research and development

and manufacturing-related operations and 14 in sales, marketing and general and administrative functions.

These headcount amounts exclude

employees in Canada that were placed on temporary lay-off in November 2023.

We believe our current headcount is adequate to conduct our

Available Information

We were founded in 1991 and reincorporated in

Delaware in 2000.

Our website address is www.perasoinc.com.

The information in our website is not incorporated by reference into this

Through a link on the Investor section of our website, we make available our annual reports on Form 10-K, quarterly reports on

Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the

Exchange Act, as soon as reasonably practicable after they are filed with, or furnished to, the Securities and Exchange Commission, or

You can also read any materials submitted electronically by us to the SEC on its website (www.sec.gov), which contains reports, proxy

and information statements, and other information regarding issuers that file electronically with the SEC, including us.

We were founded in 1991 and reincorporated in Delaware in 2000.

website address is www.perasoinc.com.

The information in our website is not incorporated by reference into this report.

Through a link

on the Investor section of our website, we make available our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports

on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as

reasonably practicable after they are filed with, or furnished to, the SEC.

You can also read any materials submitted electronically by

us to the SEC on its website (www.sec.gov), which contains reports, proxy and information statements, and other information regarding

issuers that file electronically with the SEC, including us.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business