What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-14 · 307 added, 243 removed, 784 unchanged (41% of the section changed)

6 unchanged sentences

Inventories, net

Tax credits and receivables

Prepaid expenses and other

11 unchanged sentences

Long-term lease liabilities

Other long-term liabilities

Warrant liabilities

7 unchanged sentences

one share authorized;

and one share issued and outstanding at March 31, 2024 and December 31, 2023

and one share issued and outstanding at June 30, 2024 and December 31, 2023

Common stock, $ 0.001 par value;

120,000 shares authorized;

2,289 shares and 673 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

2,706 shares and 673 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Exchangeable shares, no par value;

unlimited shares authorized;

95 shares outstanding at March 31, 2024 and December 31, 2023

87 shares and 95 shares outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Royalty and other

4 unchanged sentences

Selling, general and administrative

Severance and software license obligations

Gain on license and asset sale

11 unchanged sentences

Share and per share amounts for the three

months ended March 31, 2024 and 2023 have been adjusted to reflect the impact of a 1-for-40 reverse stock split effected in January 2024,

and six months ended June 30, 2023 have been adjusted to reflect the impact of a 1-for-40 reverse stock split effected in January 2024,

as discussed in Note 1.

6 unchanged sentences

Comprehensive

Balance as of December 31, 2023

as of December 31, 2023

$ ( 166,392 )

Shares issued for reverse

Sale of common stock and

Issuance of common stock

upon exercise of warrants

Stock-based compensation

Balance as of March 31,

issued for reverse stock split

of common stock and warrants

of common stock upon exercise of warrants

as of March 31, 2024

of common stock upon exercise of warrants

of common stock

of exchangeable shares

of common stock under stock plan, net

as of June 30, 2024

$ ( 172,848 )

2 unchanged sentences

Comprehensive

Balance as of December 31, 2022

as of December 31, 2022

$ ( 149,597 )

Exchange of exchangeable shares

Stock-based compensation

Unrealized gain on available-for-sale

Balance as of March 31,

of exchangeable shares

gain on available-for-sale securities

as of March 31, 2023

$ ( 152,745 )

of exchangeable shares

of common stock under stock plan, net

of common stock and warrants

of common stock upon exercise of warrants

recognition of fair value of warrant liability

gain on available-for-sale securities

as of June 30, 2023

$ ( 156,831 )

Share and per share amounts for the three

months ended March 31, 2024 and 2023 have been adjusted to reflect the impact of a 1-for-40 reverse stock split effected in January 2024,

and six months ended June 30, 2023 have been adjusted to reflect the impact of a 1-for-40 reverse stock split effected in January 2024,

as discussed in Note 1.

3 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

3 unchanged sentences

Change in fair value of warrant liabilities

Inventory write-downs

Allowance for bad debt

Accrued interest on debt obligation

Changes in assets and liabilities

1 unchanged sentence

Prepaid expenses and other assets

Tax credits and receivables

Accounts payable

9 unchanged sentences

Proceeds from sale of common stock and warrants, net

Repayment of financing lease

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Taxes paid to net share settle equity awards

Repayment of financing leases

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

2 unchanged sentences

Noncash investing and financing activities:

Initial recognition of warrant liability

Unrealized gain on available-for-sale securities

39 unchanged sentences

necessary to summarize fairly the Company’s financial position, results of operations and cash flows for the interim periods presented.

The operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for

the year ending December 31, 2024 or for any other future period.

The operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected

for the year ending December 31, 2024 or for any other future period.

Liquidity and Going Concern

The Company incurred net losses

of approximately $ 2.0 million for the three months ended March 31, 2024 and $ 16.8 million for the year ended December 31, 2023 and had

an accumulated deficit of approximately $ 168.4 million as of March 31, 2024.

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.

As disclosed in Note 7, in February 2024, the Company completed a public offering of its common stock and common stock purchase warrants

for net proceeds of $ 3.4 million.

The Company expects

to continue to incur operating losses for the foreseeable future as it secures additional customers and continues to invest in the commercialization

The Company incurred net losses of approximately $ 6.5 million for the

six months ended June 30, 2024 and $ 16.8 million for the year ended December 31, 2023 and had an accumulated deficit of approximately

$ 173 million as of June 30, 2024.

These and prior year losses have resulted in significant negative cash flows and have required the Company

to raise substantial amounts of additional capital.

To date, the Company has primarily financed its operations through multiple offerings

of its equity and equity-linked securities and the issuance of convertible notes and loans to investors and affiliates.

As disclosed in

Note 8, in February 2024, the Company completed a public offering of its common stock and common stock purchase warrants for net proceeds

of $ 3.4 million.

The Company expects to continue

to incur operating losses for the foreseeable future as it secures additional customers and continues to invest in the commercialization

of its products.

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or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company.

The Company’s

primary focus is producing and selling its products.

If the Company is unsuccessful in these efforts, it will need to implement additional

cost reduction strategies, which could further affect its near- and long-term business plan.

These efforts may include, but are not limited

to, reducing headcount and curtailing business activities.

If the Company is

unsuccessful in these efforts, it will need to implement additional cost reduction strategies, which could further affect its near- and

long-term business plan.

These efforts may include, but are not limited to, reducing headcount and curtailing business activities.

Basis of Presentation

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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.

COVID-19 and World Unrest

The global outbreak of the

coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S.

in March 2020.

This negatively affected the U.S.

and global economy, disrupted global supply chains, significantly restricted travel and

transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial

While the U.S.

national emergency expired in May 2023 and substantially all closures and “shelter-in-place” orders

have ended, there can be no assurance that COVID-19 will not impact the Company’s operational and financial performance in the future,

as actions taken by U.S.

and foreign government agencies to prevent disease spread are uncertain, out of the Company’s control,

and cannot be predicted.

World unrest due to wars and

terrorist attacks have led to further economic disruptions.

Mounting inflationary cost pressures and recessionary fears have negatively

impacted the global economy.

Since mid-2022, at times, the U.S.

Federal Reserve has addressed elevated inflation by increasing interest

Given current market conditions, the Company may be unable to access the capital markets, and additional capital may only be available

to the Company on terms that could be significantly detrimental to the Company’s current stockholders and to the Company’s

requirements, rapidly changing customer requirements, limited operating history, pandemics, wars and acts of terrorism and the volatility

of public markets.

The Company may be unable to access the capital markets, and additional capital may only be available to the Company

on terms that could be significantly detrimental to its existing stockholders and to its business.

Use of Estimates

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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.

with original maturities greater than three months and remaining maturities less than one year are classified as short-term investments.

Investments with remaining maturities greater than one year are classified as long-term investments.

Management generally determines the

appropriate classification of securities at the time of purchase.

The Company invests its cash in money market accounts, certificates

of deposit, corporate debt, government-sponsored enterprise bonds and municipal bonds and considers all highly liquid debt instruments

purchased with an original maturity of three months or less to be cash equivalents.

Investments with original maturities greater than

three months and remaining maturities less than one year are classified as short-term investments.

Investments with remaining maturities

greater than one year are classified as long-term investments.

Management generally determines the appropriate classification of securities

at the time of purchase.

All securities are classified as available-for-sale.

The Company’s

available-for-sale short-term and long-term investments are carried at fair value, with the unrealized holding gains and losses reported

in accumulated other comprehensive income (loss).

Realized gains and losses and declines in the value judged to be other-than-temporary

are included in the other income, net line item in the condensed consolidated statements of operations.

The cost of securities sold is

based on the specific identification method.

The Company’s available-for-sale short-term and long-term

investments are carried at fair value, with the unrealized holding gains and losses reported in accumulated other comprehensive income

Realized gains and losses and declines in the value judged to be other-than-temporary are included in the other income, net line

item in the condensed consolidated statements of operations.

The cost of securities sold is based on the specific identification method.

Fair Value Measurements

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into three broad levels:

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

Level 2—Pricing is provided by third party sources of market information obtained through the Company’s investment advisors, rather than models.

The Company does not adjust for, or apply, any additional assumptions or estimates to the pricing information it receives from advisors.

The Company’s Level 2 securities include cash equivalents and available-for-sale securities, which consisted primarily of certificates of deposit, corporate debt, and government agency and municipal debt securities from issuers with high-quality credit ratings.

The Company’s investment advisors obtain pricing data from independent sources, such as Standard & Poor’s, Bloomberg and Interactive Data Corporation, and rely on comparable pricing of other securities because the Level 2 securities are not actively traded and have fewer observable transactions.

Level 1—Inputs used to measure

fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting

Level 2—Pricing is provided by

third party sources of market information obtained through the Company’s investment advisors, rather than models.

The Company does

not adjust for, or apply, any additional assumptions or estimates to the pricing information it receives from advisors.

The Company’s

Level 2 securities include cash equivalents and available-for-sale securities, which consisted primarily of certificates of deposit,

corporate debt, and government agency and municipal debt securities from issuers with high-quality credit ratings.

The Company’s

investment advisors obtain pricing data from independent sources, such as Standard & Poor’s, Bloomberg and Interactive

Data Corporation, and rely on comparable pricing of other securities because the Level 2 securities are not actively traded and have

fewer observable transactions.

The Company considers this the most reliable information available for the valuation of the securities.

Level 3—Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment are used to measure fair value.

These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The determination of fair value for Level 3 investments and other financial instruments involves the most management judgment and subjectivity.

Level 3—Unobservable inputs that

are supported by little or no market activity and reflect the use of significant management judgment are used to measure fair value.

values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant

The determination of fair value for Level 3 investments and other financial instruments involves the most management

judgment and subjectivity.

The carrying amounts of financial assets

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The allowance for doubtful accounts receivable was approximately

$ 30,000 as of March 31, 2024 and December 31, 2023.

$ 30,000 as of June 30, 2024 and December 31, 2023.

The Company values its inventories

9 unchanged sentences

determined that it had excess and obsolete inventory, primarily related to its mmWave products, and recorded write-downs of inventory

of approximately $ 369 ,000 during the three months ended March 31, 2023.

No material write-downs of inventory were recorded during the

three months ended March 31, 2024.

If the Company’s recognition of excess or obsolete inventory is, or if its estimates of inventory’s

potential utility become, less favorable than currently expected, additional inventory write-downs may be required.

of approximately $ 629,000 during the six months ended June 30, 2023.

No material write-downs of inventory were recorded during the six

months ended June 30, 2024.

If the Company’s recognition of excess or obsolete inventory is, or if its estimates of potential utility

become, less favorable than currently expected, additional inventory write-downs may be required.

During the three and six months ended

June 30, 2024, the Company sold inventory with a value of approximately $ 81,000 that had been written down in 2023.

Intangible and Long-lived Assets

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as follows (amounts in thousands):

March 31, 2024

June 30, 2024

Developed technology

3 unchanged sentences

Customer relationships

Developed technology primarily

consisted of MoSys’ products that have reached technological feasibility and primarily relate to its memory semiconductor products

and technology.

The value of the developed technology was determined by discounting estimated net future cash flows of these products.

Amortization related to developed technology of $ 0.6 million for the three months ended March 31, 2024 has been included in cost of net

revenue in the condensed consolidated statements of operations and comprehensive loss.

Developed technology primarily consisted of MoSys’ products that

have reached technological feasibility and primarily relate to its memory semiconductor products and technology.

The value of the developed

technology was determined by discounting estimated net future cash flows of these products.

Amortization related to developed technology

of $ 0.6 million and $ 1.1 million for each of the three and six-month periods ended June 30, 2024, respectively, has been included in cost

of net revenue in the condensed consolidated statements of operations and comprehensive loss.

Customer relationships relate

3 unchanged sentences

relationships.

Amortization related to customer relationships of $ 0.2 million for the three months ended March 31, 2024 has been included

in selling, general and administrative expense in the condensed consolidated statements of operations and comprehensive loss.

Amortization related to customer relationships of $ 0.2 million and $ 0.5 million for each of the three and six month-periods

ended June 30, 2024, respectively, has been included in selling, general and administrative expense in the condensed consolidated statements

of operations and comprehensive loss.

Other amortization expense

was approximately $ 1,000 for the three months ended March 31, 2024.

At March 31, 2024, the Company

was approximately $ 1,000 and $ 2,000 for each of the three and six-month periods ended June 30, 2024, respectively.

At June 30, 2024, the Company

has not identified any intangible asset impairments.

However, current macroeconomic conditions, which have been impacted by inflation

and other world unrest, could negatively impact our business and stock price and trigger the Company to test for impairment.

will continue to evaluate for impairment indicators, as necessary, on a quarterly basis.

and other world unrest, could negatively impact the Company’s business and stock price and trigger the need to test for impairment.

The Company will continue to evaluate for impairment indicators, as necessary, on a quarterly basis.

Revenue Recognition

49 unchanged sentences

as current or non-current based on the timing of when the Company expects to recognize revenue.

As of March 31, 2024 and December 31,

As of June 30, 2024 and December 31, 2023,

contract liabilities were in a current position and included in deferred revenue.

During the three months ended

March 31, 2024, the Company recognized approximately $ 201,800 of revenue that had been included in deferred revenue as of December 31,

During the six months ended

June 30, 2024, the Company recognized approximately $ 513,000 of revenue that had been included in deferred revenue as of December 31,

See Note 6 for disaggregation of revenue by geography.

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The functional currency of

the Company is the U.S dollar.

All foreign currency transactions are initially measured and recorded in an entity’s functional currency

using the exchange rate on the date of the transaction.

All monetary assets and liabilities are remeasured at the end of each reporting

period using the exchange rate at that date.

All non-monetary assets and related expense, depreciation or amortization are not subsequently

remeasured and are measured using the historical exchange rate.

An average exchange rate may be used to recognize income and expense items

earned or incurred evenly over a period.

Foreign exchange gains and losses resulting from the settlement of such transactions are recognized

in the statement of operations, except for the gains and losses arising from the conversion of the carrying amount of the foreign currency

denominated convertible preferred shares into the functional currency that are presented as adjustment to the net loss to arrive at net

loss attributable to common stockholders.

the Company is the U.S.

All foreign currency transactions are initially measured and recorded in an entity’s functional

currency using the exchange rate on the date of the transaction.

All monetary assets and liabilities are remeasured at the end of each

reporting period using the exchange rate at that date.

All non-monetary assets and related expense, depreciation or amortization are not

subsequently remeasured and are measured using the historical exchange rate.

An average exchange rate may be used to recognize income

and expense items earned or incurred evenly over a period.

Foreign exchange gains and losses resulting from the settlement of such transactions

are recognized in the statement of operations, except for the gains and losses arising from the conversion of the carrying amount of the

foreign currency denominated convertible preferred shares into the functional currency that are presented as adjustment to the net loss

to arrive at net loss attributable to common stockholders.

Per-Share Amounts

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of the change reduced the previously reported loss per share by $ 0.04 , and increased WASO by approximately 4,000 shares for the three

months ended March 31, 2023.

The reclassification had no impact on the Company’s net loss or cash flows for the three months ended

March 31, 2024.

months ended June 30, 2023.

The impact of the change reduced the previously reported loss per share by $ 0.63 , and increased WASO by approximately

29,000 shares for the six months ended June 30, 2023, respectively.

The reclassification had no impact on the Company’s net loss

or cash flows for the three and six months ended June 30, 2023.

The following table sets forth

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have on the presentation of its consolidated financial statements.

Other recent authoritative guidance issued by the

FASB (including technical corrections to the ASC), 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.

Fair Value of Financial Instruments

1 unchanged sentence

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

March 31, 2024

June 30, 2024

Money market funds (1)

5 unchanged sentences

The following tables represent

the Company’s determination of fair value for its financial assets (cash equivalents and investments) (in thousands):

March 31, 2024

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

June 30, 2024

Cash and cash equivalents

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Finished goods

(in thousands)

Accrued Expenses and Other:

Accrued wages and employee benefits

Professional fees, legal and consulting

Software license obligations (see Note 4)

Severance benefits (see Note 4)

Warranty accrual

Severance and Software License Obligations

On November 7, 2023, the Company implemented an employee lay-off and

terminated certain consulting positions (the “Reductions”) to reduce operating expenses and cash burn, as the Company prioritized

business activities and projects that it believes will have a higher return on investment.

As part of the Reductions, the Company implemented

a temporary lay-off that impacted 16 employees (the “Employees”) of Peraso Tech.

The employment of one Employee was terminated

during the three months ended March 31, 2024.

During the three months ended June 30, 2024, the Company determined that it would not recall

any of the 10 Employees that remained on the Company’s payroll and commenced notifying the remaining Employees that their employment

would be terminated.

As a result of the terminations, the Company recorded severance charges of approximately $ 424,000 and $ 446,000 for

the three and six months ended June 30, 2024, respectively, and recorded a liability for severance costs of $ 419,000 at June 30, 2024.

The severance costs are expected to be paid over the next 13 months.

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 expensed the value of the remaining contractual

liabilities and certain prepaid amounts totaling approximately $ 1,617,000 and recorded liabilities totaling approximately $ 1,533,000 ,

which are expected to be paid through September 30, 2025.

As of June 30, 2024, the current portion of the remaining contractual liabilities

of $ 257,000 and $ 1,015,000 are included in accounts payable and accrued expenses and other, respectively (see Note 3), and the non-current

portion of $ 261,000 is included in other long-term liabilities.

Commitments and Contingencies

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Canada and recognizes lease expense on a straight-line basis over the respective lease terms.

November 2023, the Company renewed the San Jose facility lease for a one-year term, which commenced January 15, 2024 (the Renewal Term),

and, effective with the commencement of the Renewal Term, the Company ceased accounting for the lease under ASC 842.

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.

In May 2022, the Company entered into a lease for the facility in Markham with a 60-month term, which commenced June 21, 2022.

landlord also provided a lease incentive of approximately $ 286,200 (the Incentive).

In 2023, the Company received payment of $ 143,100

from the Markham landlord of the first installment of the Incentive.

The remaining balance of the Incentive is paid to the Company in

the form of an adjustment to rent during the last three months of each year during the remaining lease term.

During 2023, a credit of

$ 35,775 was made against the rent during the three months ended December 31, 2023.

As of March 31, 2024, the pending Incentive to be received

was $ 107,325 .

In November 2023, the Company renewed the San Jose facility lease for

a one-year term, which commenced January 15, 2024 (the Renewal Term), and, effective with the commencement of the Renewal Term, the Company

ceased accounting for the lease under ASC 842.

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.

In May 2022, the Company entered into a lease for the facility in

Markham with a 60-month term, which commenced June 21, 2022.

The Markham landlord also provided a lease incentive of approximately $ 286,200

(the Incentive).

In 2023, the Company received payment of $ 143,100 from the Markham landlord of the first installment of the Incentive.

The remaining balance of the Incentive is paid to the Company in the form of an adjustment to rent during the last three months of each

year during the remaining lease term.

During 2023, a credit of $ 35,775 was made against the rent during the three months ended December

As of June 30, 2024, the pending Incentive to be received was $ 107,325 .

Upon the renewal of the Toronto

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of a right-of-use asset of approximately $ 124,000 and lease liability of approximately $ 117,000 .

following table provides the details of right-of-use assets and lease liabilities as of March 31, 2024 (in thousands):

Three Months Ended

following table provides the details of right-of-use assets and lease liabilities as of June 30, 2024 (in thousands):

Right-of-use assets:

Operating leases

Finance lease

Finance leases

Total right-of-use assets

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Operating leases

Finance lease

Finance leases

Total lease liabilities

Future minimum payments under

the leases at March 31, 2024 are listed in the table below (in thousands):

the leases at June 30, 2024 are listed in the table below (in thousands):

Year ending December 31,

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the details of supplemental cash flow information (in thousands):

Three Months Ended

Six Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

1 unchanged sentence

Rent expense was approximately

$ 0.2 million for each of the three-month periods ended March 31, 2024 and 2023.

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.

$ 0.2 million for each of the three-month periods ended June 30, 2024 and 2023.

Rent expense was approximately $ 0.3 million and $ 0.4 million

for the six-month periods ended June 30, 2024 and 2023, respectively.

In addition to the minimum lease payments, the Company is responsible

for property taxes, insurance and certain other operating costs related to the leased facilities and equipment.

Indemnification

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No material amounts were reflected in the Company’s condensed consolidated financial

statements for the three months ended March 31, 2024 and 2023 related to these indemnifications.

statements for the three and six months ended June 30, 2024 and 2023 related to these indemnifications.

The Company has not estimated

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warranty claim experience and includes such costs in cost of net revenues.

Warranty costs were not material for the three months ended

March 31, 2024 and 2023.

Warranty costs were not material for the three and six months

ended June 30, 2024 and 2023.

Legal Matters

7 unchanged sentences

The Company’s primary

purchase obligations include non-cancelable purchase orders for inventory and computer-aided-design (CAD) software.

At March 31, 2024,

the Company had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of

approximately $ 3.2 million and non-cancelable purchase orders for CAD software of $ 2.2 million.

purchase obligations include non-cancelable purchase orders for inventory.

At June 30, 2024, the Company had outstanding non-cancelable

purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $ 2.9 million.

As disclosed in

Note 4, as of June 30, 2024, the Company recorded liabilities of approximately $ 1.6 million for non-cancelable license commitments for

computer-aided design software.

Business Segments, Concentration of Credit Risk and

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Three Months Ended

Six Months Ended

United States

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Three months Ended

Six Months Ended

Product category

1 unchanged sentence

mmWave other products

The following lists significant

customers that represented more than 10% of the Company’s total revenue and/or net accounts receivable balance, as applicable, at

each respective balance sheet date:

The following table lists significant customers that represented more

than 10% of the Company’s total revenue during each respective period:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Customer A 55 % * 53 % 10 %

Customer B 24 % 46 % 23 % 27 %

Customer C 12 % * * *

Customer D * 23 % * 26 %

Customer E * * * 15 %

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

For the Three Months Ended

The following lists significant

vendors that represented more than 10% of the Company’s total accounts payable balance at each respective balance sheet date:

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

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The Company reflected compensation

costs of $ 1.0 million and $ 1.1 million related to the vesting of stock options during each of the three-month periods ended March 31,

costs of $ 2.0 million and $ 2.1 million related to the vesting of stock options during each of the six-month periods ended June 30, 2024

and 2023, respectively.

At March 31, 2024, the unamortized compensation cost was approximately $ 2.2 million related to stock options

and is expected to be recognized as expense over a weighted average period of approximately 0.8 years.

At June 30, 2024, the unamortized compensation cost was approximately $ 1.2 million related to stock options and

is expected to be recognized as expense over a weighted average period of approximately 0.6 years.

The Company reflected compensation

costs of $ 0.2 million related to the vesting of restricted stock during each of the three months ended March 31, 2024 and 2023.

The unamortized

compensation cost at March 31, 2024 was $ 0.7 million related to restricted stock units and is expected to be recognized as expense over

a weighted average period of approximately 0.9 years.

There were no stock options granted or exercised during the three months ended

March 31, 2024 and 2023.

costs of $ 0.4 million and $ 0.5 million related to the vesting of restricted stock units during each of the six-month periods ended June

30, 2024 and 2023, respectively.

The unamortized compensation cost at June 30, 2024 was $ 0.5 million related to restricted stock units

and is expected to be recognized as expense over a weighted average period of approximately 0.7 years.

There were no stock options granted

or exercised during the six months ended June 30, 2024 and 2023.

Common Stock Options and Restricted Stock

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The following table summarizes

the activity in the shares available for grant under the Plans during the three months ended March 31, 2024 and options outstanding as

of March 31, 2024 (in thousands, except exercise price):

the activity in the shares available for grant under the Plans during the three and six months ended June 30, 2024 and options outstanding

as of June 30, 2024 (in thousands, except exercise price):

Options Outstanding

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Balance as of March 31, 2024

RSUs cancelled and returned to the 2019 Plan

Options cancelled

Balance as of June 30, 2024

A summary of RSU activity

2 unchanged sentences

Non-vested shares as of March 31, 2024

Non-vested shares as of June 30, 2024

The following table summarizes

significant ranges of outstanding and exercisable options as of March 31, 2024 (in thousands, except contractual life and exercise price):

Options Outstanding

Options Exercisable

Range of Exercise Price

significant ranges of outstanding and exercisable options as of June 30, 2024 (in thousands, except contractual life and exercise price):

Options Outstanding Options Exercisable

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 5.39 $ 62.80 2 $ 62.80 $ —

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pre-funded warrants, were approximately $ 3.4 million.

Series A warrants and Series B warrants each have an exercise price of $ 2.25 per share and were immediately exercisable upon issuance.

The Series A warrants expire on the five-year anniversary of the date of issuance and the Series B warrants expire on the six-month anniversary

of the date of issuance.

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.

The exercise price and number of shares of common stock issuable

upon exercise of the warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar

events affecting the common stock and the exercise price.

Subject to limited exceptions, a holder may not exercise any portion of its

warrants to the extent that the holder would beneficially own more than 9.99 % or 4.99 % (at the election of the holder) of the Company’s

outstanding common stock after exercise.

On February 8, 2024, pursuant

to the Underwriting Agreement, the Company issued Series A warrants to the Underwriter to purchase up to 139,108 shares of common stock

at an exercise price of $ 2.625 , subject to adjustments, which are exercisable at any time and from time to time, in whole or in part,

until February 8, 2029.

The Series A warrants and Series

B warrants each have an exercise price of $ 2.25 per share and were immediately exercisable upon issuance.

The Series A warrants expire

on February 8, 2029 and the Series B warrants expire on August 8, 2024.

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.

price and number of shares of common stock issuable upon exercise of the warrants is subject to appropriate adjustment in the event of

stock dividends, stock splits, reorganizations or similar events affecting the common stock and the exercise price.

Subject to limited

exceptions, a holder may not exercise any portion of its warrants to the extent that the holder would beneficially own more than 9.99 %

or 4.99 % (at the election of the holder) of the Company’s outstanding common stock after exercise.

On February 8, 2024, pursuant to the Underwriting Agreement, the Company

issued Series A warrants to the Underwriter to purchase up to 139,108 shares of common stock at an exercise price of $ 2.625 , subject to

adjustments, which are exercisable at any time and from time to time, in whole or in part, until February 8, 2029.

June 2024 Private Sale

On June 11, 2024, the Company

entered into a Stock Purchase Agreement (the Purchase Agreement) with a member of the Company’s board of directors, pursuant to

which the Company sold and the board member purchased 100,000 shares (the Shares) of common stock at a price per share of $ 1.27 .

sold pursuant to the Purchase Agreement were issued as restricted securities as defined in Rule 144 of the Securities Act of 1933, as

Warrants Classified as Equity

As of March 31, 2024, the

Company had the following equity-classified common stock purchase warrants outstanding (share amounts in thousands):

Number of Shares

Exercise Price

Balance as of December 31, 2023

June 28, 2023

As of June 30, 2024, the Company

had the following equity-classified common stock purchase warrants outstanding (share amounts in thousands):

Shares Exercise Price Expiration

Balance as of December 31, 2023 7 $ 28.00 June 28, 2023

Pre-funded warrants issued 1,425 $ 0.001 —

Pre-funded warrants exercised ( 1,001 ) $ 0.001 —

Series A warrants issued

February 8, 2029

Series A warrants issued

February 8, 2029

Series B warrants issued

August 8, 2024

Series A warrants issued 3,974 $ 2.250 February 8, 2029

Series A warrants issued 139 $ 2.625 February 8, 2029

Series B warrants issued 3,974 $ 2.250 August 8, 2024

Balance as of March 31, 2024 8,518

During the three months ended

March 31, 2024, holders exercised warrants for an aggregate of 674,920 shares of common stock based on the exercise price of $ 0.001 per

share for aggregate proceeds of approximately $ 675 .

Also, during the three months ended March 31, 2024, holders exercised warrants for

an aggregate of 326,190 shares of common stock on a cashless basis and surrendered 127 shares of common stock as payment of the aggregate

exercise price.

Pre-funded warrants exercised ( 307 ) $ 0.001 —

Balance as of June 30, 2024 8,211

During the three months ended June 30, 2024, holders exercised warrants

for an aggregate of 307,460 shares of common stock at an exercise price of $ 0.001 per share for aggregate proceeds of approximately $ 307 .

During the three months ended March 31, 2024, holders exercised warrants for an aggregate of 674,920 shares of common stock at an exercise

price of $ 0.001 per share for aggregate proceeds of approximately $ 675 .

Also, during the three months ended March 31, 2024, holders exercised

warrants for an aggregate of 326,190 shares of common stock at an exercise price of $ 0.001 per share on a cashless basis and surrendered

127 shares of common stock as payment of the aggregate exercise price.

Warrants Classified as Liabilities

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income (expense) in the consolidated statements of operations and comprehensive loss.

of March 31, 2024 and December 31, 2023, the Company had the following liability-classified warrants outstanding (amounts in thousands):

Shares Exercise

Price Expiration

of June 30, 2024 and December 31, 2023, the Company had the following liability-classified warrants outstanding (amounts in thousands):

Shares Exercise Price Expiration Date

Warrants issued - November 2022 92 $ 40.00 May 28, 2028

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Balance as of March 31, 2024

Change in fair value of warrants

Balance as of June 30, 2024

The fair value of the Purchase

Warrants at March 31, 2024 was determined using the Black Scholes model with the assumptions in the following table.

The table also includes

the total fair value determined at the valuation date based on these assumptions.

Warrants at June 30, 2024 was determined using the Black Scholes model with the assumptions in the following table.

Expected term based on contractual term

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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 at valuation date based on these assumptions.

Expected term based on contractual term

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The Company recorded compensation expense of approximately $ 27,800

for the employed family member for each of the three months ended March 31, 2024 and 2023 .

and $ 55,300 for the employed family member during the three and six months ended June 30, 2024, respectively.

See Note 8 for a discussion of the Company’s sale of common stock

to a member of the Company’s board of directors in June 2024.

License and Asset Sale Transaction

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set forth in the Intel Agreement relating to various due diligence activities of Intel regarding the Licensed Technology.

The Company determined that

the license and asset sale did not qualify as a sale of a business, but as a sale of a non-financial asset, with the resultant gain recorded

as income from operations in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets .

During the year ended December 31, 2022, the Company recognized a $ 2.6 million gain on this transaction, net of transaction costs.

the three months ended March 31, 2023, Intel paid the Holdback, and the Company recognized a $ 0.4 million gain, net of transaction costs,

which was recorded as a reduction of operating expenses in the condensed consolidated statements of operations and comprehensive loss.

The Company determined that the license and asset sale did not qualify

as a sale of a business, but as a sale of a non-financial asset, with the resultant gain recorded as income from operations in accordance

with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets .

During the year ended December

31, 2022, the Company recognized a $ 2.6 million gain on this transaction, net of transaction costs.

In 2023, Intel paid the Holdback,

and the Company recognized a $ 0.4 million gain, net of transaction costs, which was recorded as a reduction of operating expenses in the

condensed consolidated statements of operations and comprehensive loss.

Memory IC Product End-of-Life

Semiconductor Manufacturing Corporation (TSMC) is the sole foundry that manufactures the wafers used to produce the Company’s memory

TSMC has informed the Company that TSMC is discontinuing the foundry process used to produce wafers, in turn, necessary to

manufacture the Company’s memory ICs.

As a result, in May 2023, the Company informed its customers that the Company would be initiating

an end-of-life (EOL) of its memory IC products.

As of March 31, 2024, the Company had a non-cancelable purchase order backlog for its

memory IC products of approximately $ 12.6 million.

The Company expects to fulfill this backlog and complete final shipments of its memory

IC products by March 31, 2025.

Taiwan Semiconductor Manufacturing

Corporation (TSMC) is the sole foundry that manufactures the wafers used to produce the Company’s memory IC products.

TSMC has informed

the Company that TSMC is discontinuing the foundry process used to produce wafers, in turn, necessary to manufacture the Company’s

As a result, in May 2023, the Company informed its customers that the Company would be initiating an end-of-life (EOL) of

its memory IC products.

As of June 30, 2024, the Company had a non-cancelable purchase order backlog for its memory IC products of approximately

$ 9.1 million.

The Company expects to fulfill this backlog and complete final shipments of its memory IC products by March 31, 2025.

Subsequent Events

to March 31, 2024, the holders of the pre-funded warrants issued in the Offering exercised warrants for an additional 307,460 shares of

common stock.

August 6, 2024, the Company extended the expiration date of the Series B warrants issued in the Offering (the “Series B Warrants”)

(New York City time) on October 7, 2024, by entering into an amendment to the Warrant Agency Agreement dated as of February

8, 2024 by and between the Company and the warrant agent, Equiniti Trust Company, LLC.

The Series B Warrants would otherwise have

expired on August 8, 2024.

See Note 8 for additional information about the Series B Warrants and the Offering.

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-Q

Item 1. Financial Statements