What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-12 compared with 2025-08-13 · 323 added, 239 removed, 723 unchanged (44% of the section changed)

2 unchanged sentences

(In thousands, except par value)

September 30,

Current assets

20 unchanged sentences

20,000 shares authorized;

and outstanding

none issued and outstanding

Series A, special voting preferred stock, $ 0.01 par value;

one share authorized,

issued and outstanding at June 30, 2025 and December 31, 2024

one share authorized, issued and outstanding at September 30, 2025 and December 31, 2024

Common stock, $ 0.001 par value;

120,000 shares authorized;

and 4,474 shares issued and outstanding at June 30, 2025

and December 31, 2024, respectively

7,580 and 4,474 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Exchangeable shares, no par value;

unlimited shares authorized;

shares outstanding at June 30, 2025 and December 31, 2024, respectively

Issuable shares, 777 and 917 shares at June 30, 2025 and December 31, 2024,

57 and 60 shares outstanding at September 30, 2025 and December 31, 2024, respectively

Issuable shares, 837 and 917 shares at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Royalty and other

8 unchanged sentences

Change in fair value of warrant liabilities

Other income (expense), net

Other expense, net

Net loss per share

20 unchanged sentences

Balance as of June 30, 2025

At-the market sales of stock, net

Issuance of abeyance shares

Issuance of common stock and warrants from warrant inducement offering, net

Issuance of common stock under stock plan, net

Stock-based compensation

Balance as of September 30, 2025

$ ( 180,630 )

14 unchanged sentences

Balance as of June 30, 2024

At-the market sales of stock, net

Shares issued for services

Stock-based compensation

Balance as of September 30, 2024

$ ( 175,560 )

3 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

6 unchanged sentences

Accounts receivable

Prepaid expenses and other assets

Prepaid expenses and other

Accounts payable

7 unchanged sentences

Cash flows from financing activities:

Proceeds from sale of common stock and warrants, net

Proceeds from Warrant Inducement Offering

Proceeds from at-the-market sales of stock, net

3 unchanged sentences

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

The Company and Summary of Significant Accounting Policies

Inc., formerly known as MoSys, Inc.

Peraso Inc., formerly known

as MoSys, Inc.

(the Company), was incorporated in California in 1991 and reincorporated in 2000 in Delaware.

The Company is a fabless semiconductor company specializing in the development of millimeter wave (mmWave), which is generally described

as the frequency band from 24 Gigahertz (GHz) to 300 GHz, wireless technology.

The Company derives revenue from selling its semiconductor

devices and modules and performance of non-recurring engineering services.

The Company is a fabless

semiconductor company specializing in the development of millimeter wave (mmWave), which is generally described as the frequency band

from 24 Gigahertz (GHz) to 300 GHz, wireless technology.

The Company derives revenue from selling its semiconductor devices and modules

and performance of non-recurring engineering services.

On September 14, 2021, the

22 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 and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected

for the year ending December 31, 2025 or for any other future period.

The operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be

expected for the year ending December 31, 2025 or for any other future period.

Liquidity and Going Concern

The Company incurred net losses

of approximately $ 2.3 million for the six months ended June 30, 2025 and $ 10.7 million for the year ended December 31, 2024 and had an

accumulated deficit of approximately $ 179.4 million as of June 30, 2025.

These and prior year losses have resulted in significant negative

cash flows and have required the Company to raise substantial amounts of additional capital.

To date, the Company has primarily financed

its operations through multiple offerings of its common stock and warrants and the issuance of convertible notes and loans to investors

and affiliates.

of approximately $ 3.5 million for the nine months ended September 30, 2025 and $ 10.7 million for the year ended December 31, 2024 and

had an accumulated deficit of approximately $ 180.6 million as of September 30, 2025.

These and prior year losses have resulted in significant

negative cash flows and have required the Company to raise substantial amounts of additional capital.

To date, the Company has primarily

financed its operations through multiple offerings of its common stock and warrants and the issuance of convertible notes and loans to

investors and affiliates.

The Company expects to continue

95 unchanged sentences

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 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.

11 unchanged sentences

the fair value of its warrant liabilities using Level 3 inputs.

Derivatives and Liability-Classified

Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the

specific terms of the warrants and the guidance provided by the Financial Accounting Standards Board (FASB) in Accounting Standards Codification

(ASC) 480 , Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815) .

The assessment

considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant

to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the

Company’s own stock and whether the holders of the warrants could potentially require net cash settlement in a circumstance outside

of the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional

judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

Derivatives and Liability-Classified Instruments

The Company accounts for common

stock warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants

and the guidance provided by the Financial Accounting Standards Board (FASB) in Accounting Standards Codification (ASC) 480 , Distinguishing

Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815).

The assessment considers whether the warrants

are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the

requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and

whether the holders of the warrants could potentially require net cash settlement in a circumstance outside of the Company’s control,

among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the

time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

Allowance for Doubtful Accounts

8 unchanged sentences

The allowance for doubtful accounts receivable was approximately

$ 16,800 and $ 30,000 as of June 30, 2025 and December 31, 2024, respectively.

$ 16,500 and $ 30,000 as of September 30, 2025 and December 31, 2024, respectively.

The Company values its inventories

57 unchanged sentences

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

Royalty and other

Royalty and other revenue

Historically, the Company’s

18 unchanged sentences

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

As of June 30, 2025 and December 31, 2024,

As of September 30, 2025 and December

31, 2024, contract liabilities were in a current position and included in deferred revenue.

During the six months ended

June 30, 2025, the Company recognized approximately $ 320,000 of revenue that had been included in deferred revenue as of December 31,

During the nine months ended

September 30, 2025, the Company recognized approximately $ 333,400 of revenue that had been included in deferred revenue as of December

See Note 6 for disaggregation of revenue by geography.

44 unchanged sentences

during the period.

In addition, the Company includes the number of abeyance shares and shares of common stock issuable upon exercise of

In addition, the Company includes the number of issuable shares and shares of common stock issuable upon exercise of

pre-funded warrants as outstanding.

6 unchanged sentences

(in thousands):

Six months ended

Nine months ended

September 30,

Escrow shares - exchangeable shares

5 unchanged sentences

Recently Issued Accounting Pronouncements

In December 2023, the FASB

issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which expands disclosures in an entity’s

income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

will be effective for annual periods beginning after December 15, 2024.

The Company does not expect the adoption of ASU No.

have a material impact on its consolidated financial statements.

In November 2024, the FASB

16 unchanged sentences

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

June 30, 2025

September 30, 2025

Money market funds (1)

6 unchanged sentences

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

June 30, 2025

September 30, 2025

Cash and cash equivalents

2 unchanged sentences

Balance Sheet Detail

September 30,

(in thousands)

2 unchanged sentences

Finished goods

September 30,

(in thousands)

16 unchanged sentences

the Company recorded severance charges of approximately $ 446,000 during the six months ended June 30, 2024.

The remaining severance liabilities

of approximately $ 10,000 as of June 30, 2025 were paid in July 2025.

As a result of the decision to not recall the Employees, the Company

determined that it was probable that a number of its non-cancelable licenses for computer-aided design software would not be utilized

during the remaining license terms.

During the three months ended June 30, 2024, the Company accrued the value of the remaining contractual

liabilities of approximately $ 1,617,000 .

During the three months ended June 30, 2025, a licensor terminated one of the license agreements

and initiated a refund of approximately $ 56,300 for amounts previously paid by the Company.

As a result, the Company reversed approximately

$ 222,600 of expense and approximately $ 166,300 of the related contractual liabilities for this licensor during the three months ended

June 30, 2025.

As of June 30, 2025, the remaining contractual liabilities of approximately $ 0.2 million and $ 0.2 million were included

in accrued expenses and other (see Note 3) and accounts payable, respectively, which are expected to be paid by September 30, 2025.

The severance liabilities

were fully paid as of September 30, 2025.

As a result of the decision

to not recall the Employees, the Company determined that it was probable that a number of its non-cancelable licenses for computer-aided

design software would not be utilized during the remaining license terms.

During the three months ended June 30, 2024, the Company accrued

the value of the remaining contractual liabilities of approximately $ 1,617,000 .

During the three months ended June 30, 2025, a licensor

terminated one of the license agreements and initiated a refund of approximately $ 56,300 for amounts previously paid by the Company.

a result, the Company reversed approximately $ 222,600 of expense and approximately $ 166,300 of related contractual liabilities during

the three months ended June 30, 2025.

As of September 30, 2025, the remaining contractual liabilities of approximately $ 0.2 million were

included in accounts payable and are expected to be paid by December 31, 2025.

Commitments and Contingencies

Company has operating leases for its facilities in Toronto and Markham, Ontario, Canada and recognizes lease expense on a straight-line

basis over the respective lease terms.

The Company had an operating lease for its corporate headquarters facility in San Jose, California

that was not renewed when the lease term expired on January 14, 2025.

December 2024, the Company renewed the Toronto office lease for a one-year term, which commenced January 1, 2025, and the Company ceased

accounting for the lease under ASC 842.

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

right-of-use asset and corresponding liability of approximately CAD$ 1.0 million for the Markham facility lease were measured at the present

value of the future minimum lease payments.

The Company has operating

leases for its facilities in Toronto and Markham, Ontario, Canada and recognizes lease expense on a straight-line basis over the respective

The Company had an operating lease for its corporate headquarters facility in San Jose, California that was not renewed when

the lease term expired on January 14, 2025.

In December 2024, the Company

renewed the Toronto office lease for a one-year term, which commenced January 1, 2025, and the Company ceased accounting for the lease

under ASC 842.

In May 2022, the Company entered

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

The initial right-of-use asset and corresponding

liability of approximately CAD$ 1.0 million for the Markham facility lease were measured at the present value of the future minimum lease

The discount rate used to measure the lease assets and liabilities was 8 %.

The Markham landlord

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

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

the Markham landlord of the first installment of the Incentive.

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

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

As of June 30, 2025, the

pending Incentive to be received was CAD$ 71,550 .

March 1, 2022, the Company entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of

a right-of-use asset and lease liability of approximately $ 274,000 .

On March 1, 2025, the finance lease expired, and the Company took

ownership of the equipment and the related right of use asset and liability was fully amortized.

November 1, 2022, the Company entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition

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

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

The Markham landlord also provided a lease incentive

of approximately CAD$ 286,200 (the Incentive).

In 2023, the Company received payment of CAD$ 143,100 from the Markham landlord of the first

installment of the Incentive.

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

the last three months of each calendar year during the remaining lease term.

As of September 30, 2025, the pending Incentive to be received

was CAD$ 71,550 .

On March 1, 2022, the Company

entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of a right-of-use asset and lease

liability of approximately $ 274,000 .

On March 1, 2025, the finance lease expired, and the Company took ownership of the equipment and

the related right of use asset and liability was fully amortized.

On November 1, 2022, the Company

entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of a right-of-use asset of approximately

$ 124,000 and lease liability of approximately $ 117,000 .

The final invoice was dated August 15, 2025.

The finance lease expired and

the Company took ownership of the equipment.

The related right-of-use asset and liability will be fully amortized on October 15,

The following table provides

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

Right-of-use assets:

Operating leases

Finance leases

Total right-of-use assets

1 unchanged sentence

Operating leases

Finance leases

Total lease liabilities

Future minimum payments under

the leases at June 30, 2025 are listed in the table below (in thousands):

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

Year ending December 31,

4 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended

September 30,

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

1 unchanged sentence

Rent expense was approximately

$ 0.1 million and $ 0.2 million for the three months ended June 30, 2025 and 2024, respectively.

Rent expense was approximately $ 0.2 million

and $ 0.3 million for the six-months ended June 30, 2025 and 2024, 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.

$ 0.1 million and $ 0.2 million for the three months ended September 30, 2025 and 2024, respectively.

Rent expense was approximately $ 0.4

million for each of the nine-months ended September 30, 2025 and 2024.

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

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

Indemnification

8 unchanged sentences

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

statements for the three months ended June 30, 2025 and 2024 related to these indemnifications.

statements for the three and nine months ended September 30, 2025 and 2024 related to these indemnifications.

The Company has not estimated

7 unchanged sentences

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

Warranty costs were not material for the three and six months

ended June 30, 2025 and 2024.

Warranty costs were not material for the three and nine months

ended September 30, 2025 and 2024.

Legal Matters

8 unchanged sentences

purchase obligations include non-cancelable purchase orders for inventory.

At June 30, 2025, the Company had outstanding non-cancelable

At September 30, 2025, the Company had outstanding non-cancelable

purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $ 2.7 million.

Business Segments, Concentration of Credit Risk and

Significant Customers

Business Segments, Concentration of Credit Risk and Significant

Segment Information

29 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total net revenue

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

North America

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Product category

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

* Represents less than 10%

1 unchanged sentence

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

September 30,

Represents less than 10%

1 unchanged sentence

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

Accounts Payable

September 30,

Represents less than 10%

36 unchanged sentences

Stock-Based Compensation Expense

The Company reflected compensation costs related to the vesting of

stock options of $ 0.2 million and $ 2.0 million during each of the six-month periods ended June 30, 2025 and 2024, respectively.

30, 2025, the unamortized compensation cost was approximately $ 0.8 million related to stock options and is expected to be recognized as

expense over a weighted average period of approximately 2.3 years.

The Company reflected compensation costs of approximately $ 25,000

and $ 0.4 million related to the vesting of restricted stock units during each of the six-month periods ended June 30, 2025 and 2024, respectively.

The unamortized compensation cost at June 30, 2025 was approximately $ 22,000 related to restricted stock units and is expected to be recognized

as expense over a weighted average period of approximately 0.3 years.

No stock options were granted or exercised during the six

months ended June 30, 2024.

The Company reflected compensation

costs related to the vesting of stock options of $ 0.4 million and $ 2.7 million during the nine-months ended September 30, 2025 and 2024,

respectively.

At September 30, 2025, the unamortized compensation cost was approximately $ 0.7 million related to stock options and is

expected to be recognized as expense over a weighted average period of approximately 2.0 years.

The Company reflected compensation

costs of approximately $ 30,000 and $ 0.6 million related to the vesting of restricted stock units during the nine-months ended September

30, 2025 and 2024, respectively.

The unamortized compensation cost at September 30, 2025 was approximately $ 5,000 related to restricted

stock units and is expected to be recognized as expense over a weighted average period of approximately 0.2 years.

No stock options

were granted or exercised during the nine months ended September 30, 2024.

Valuation Assumptions and Expense Information for Stock-Based

The fair value of the Company’s

share-based payment awards for the six months ended June 30, 2025 was estimated on the grant dates using the Black-Scholes model with

the following assumptions:

share-based payment awards for the nine months ended September 30, 2025 was estimated on the grant dates using the Black-Scholes model

with the following assumptions:

Option Grants

Grant Date 02/11/25 08/07/25

Interest rate (risk-free rate) 4.34 % 3.79 %

Expected volatility 119 % 118 %

Expected term 4.38 years

Expected term 4.38 years 4.75 years

Expected dividend 0 % 0 %

Fair value of option grants (in thousands) $ 832

The risk-free interest rate was derived from the U.S.

Treasury Yield

Curve Rates as published by the U.S.

Department of the Treasury as of the grant date for terms equal to the expected terms of the options.

The expected volatility was based on the historical volatility of the Company’s stock price over the expected term of the options.

The expected term of options granted was derived from historical data based on employee exercises and post-vesting employment termination

A dividend yield of zero is applied because the Company has never paid dividends and has no intention to pay dividends in the

Fair value (in thousands) $ 832 $ 69

The risk-free interest rate

was derived from the U.S.

Treasury Yield Curve Rates as published by the U.S.

Department of the Treasury as of the grant date for terms

equal to the expected terms of the options.

The expected volatility was based on the historical volatility of the Company’s stock

price over the expected term of the options.

The expected term of options granted was derived from historical data based on employee exercises

and post-vesting employment termination behavior.

A dividend yield of zero is applied because the Company has never paid dividends and

has no intention to pay dividends in the near future.

The Company accounts for forfeitures as they occur.

10 unchanged sentences

The following table summarizes

the activity in the shares available for grant under the Plans during the three and six months ended June 30, 2025 and options outstanding

as of June 30, 2025 (in thousands, except exercise price):

the activity in the shares available for grant under the Plans during the three and nine months ended September 30, 2025 and options outstanding

as of September 30, 2025 (in thousands, except exercise price):

Options Outstanding

6 unchanged sentences

Balance as of June 30, 2025

Options granted

Options exercised

Options cancelled and returned to the 2019 Plan

Balance as of September 30, 2025

The following table summarizes

significant ranges of outstanding and exercisable options as of June 30, 2025 (in thousands, except contractual life and exercise price):

significant ranges of outstanding and exercisable options as of September 30, 2025 (in thousands, except contractual life and exercise

Options Outstanding Options Exercisable

12 unchanged sentences

Non-vested shares as of June 30, 2025

Non-vested shares as of September 30, 2025

Stockholders’ Equity

February 2024 Public Offering

February 6, 2024, the Company entered into an underwriting agreement (the Underwriting Agreement) with Ladenburg Thalmann & Co.

(Ladenburg), as the sole underwriter, relating to the issuance and sale in a public offering (the Offering) of:

(i) 480,000 shares of

common stock, (ii) pre-funded warrants to purchase up to 1,424,760 shares of common stock, (iii) Series A warrants to purchase up to 3,809,520

shares of common stock, (iv) Series B warrants to purchase up to 3,809,520 shares of common stock, and (v) up to 285,714 additional shares

of common stock, Series A warrants to purchase up to 571,428 shares of common stock and Series B warrants to purchase up to 571,428 shares

of common stock that may be purchased pursuant to a 45-day option to purchase additional securities granted to Ladenburg by the Company.

Ladenburg partially exercised this option on February 7, 2024 for 82,500 shares of common stock, Series A warrants to purchase up to 165,000

shares of common stock and Series B warrants to purchase up to 165,000 shares of common stock.

The combined public offering price of each

share of common stock, together with the accompanying Series A warrants and Series B warrants, was $ 2.10 , less underwriting discounts

and commissions.

The combined public offering price of each pre-funded warrant, together with the accompanying Series A warrants and Series

B warrants, was $ 2.099 , less underwriting discounts and commissions.

The Offering, including the additional shares of common stock, Series

A warrants and Series B warrants sold pursuant to the partial exercise of Ladenburg’s option, closed on February 8, 2024.

net proceeds from the Offering, including the additional shares of common stock, Series A warrants and Series B warrants sold pursuant

to the partial exercise of Ladenburg’s option, after deducting underwriting discounts and commissions and other estimated Offering

expenses payable by the Company and excluding any proceeds from the exercise of the Series A warrants, Series B warrants and pre-funded

warrants, were approximately $ 3.4 million.

Series A warrants have an exercise price of $ 2.25 , were immediately exercisable upon issuance, and expire on February 8, 2029 .

B warrants had an original exercise price of $ 2.25 per share, were immediately exercisable upon issuance, and expired on November 8, 2024 .

The Series B warrants had an initial expiration date of August 8, 2024, which was extended to November 8, 2024 pursuant to amendments

to the Warrant Agency Agreement dated as of February 8, 2024 by and between the Company and the warrant agent, Equiniti Trust Company,

LLC (the Warrant Agency Agreement) (see Note 9).

The pre-funded warrants have an exercise price of $ 0.001 per share, were exercisable

immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full.

As of December 31, 2024, the

holders exercised all of the pre-funded warrants for 1,424,760 shares of common stock.

The exercise price and number of shares of common

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

or similar events affecting the common stock and the exercise price.

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

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

outstanding common stock after exercise.

On February 6, 2024, the Company

entered into an underwriting agreement (the Underwriting Agreement) with Ladenburg Thalmann & Co.

(Ladenburg), as the sole underwriter,

relating to the issuance and sale in a public offering (the Offering) of:

(i) 480,000 shares of common stock, (ii) pre-funded warrants

to purchase up to 1,424,760 shares of common stock, (iii) Series A warrants to purchase up to 3,809,520 shares of common stock, (iv) Series

B warrants to purchase up to 3,809,520 shares of common stock, and (v) up to 285,714 additional shares of common stock, Series A warrants

to purchase up to 571,428 shares of common stock and Series B warrants to purchase up to 571,428 shares of common stock that may be purchased

pursuant to a 45-day option to purchase additional securities granted to Ladenburg by the Company.

Ladenburg partially exercised this

option on February 7, 2024 for 82,500 shares of common stock, Series A warrants to purchase up to 165,000 shares of common stock and Series

B warrants to purchase up to 165,000 shares of common stock.

The combined public offering price of each share of common stock, together

with the accompanying Series A warrants and Series B warrants, was $ 2.10 , less underwriting discounts and commissions.

The combined public

offering price of each pre-funded warrant, together with the accompanying Series A warrants and Series B warrants, was $ 2.099 , less underwriting

discounts and commissions.

The Offering, including the additional shares of common stock, Series A warrants and Series B warrants sold

pursuant to the partial exercise of Ladenburg’s option, closed on February 8, 2024.

The net proceeds from the

Offering, including the additional shares of common stock, Series A warrants and Series B warrants sold pursuant to the partial exercise

of Ladenburg’s option, after deducting underwriting discounts and commissions and other estimated Offering expenses payable by the

Company and excluding any proceeds from the exercise of the Series A warrants, Series B warrants and pre-funded warrants, were approximately

$ 3.4 million.

The Series A warrants have

an exercise price of $ 2.25 , were immediately exercisable upon issuance, and expire on February 8, 2029 .

The Series B warrants had an original

exercise price of $ 2.25 per share, were immediately exercisable upon issuance, and expired on November 8, 2024 .

The Series B warrants

had an initial expiration date of August 8, 2024, which was extended to November 8, 2024 pursuant to amendments to the Warrant Agency

Agreement dated as of February 8, 2024 by and between the Company and the warrant agent, Equiniti Trust Company, LLC (the Warrant Agency

Agreement) (see Note 9).

The pre-funded warrants have an exercise price of $ 0.001 per share, were exercisable immediately and may be exercised

at any time until all of the pre-funded warrants are exercised in full.

As of December 31, 2024, the holders exercised all of the pre-funded

warrants for 1,424,760 shares of common stock.

The exercise price and number of shares of common stock issuable upon exercise of the warrants

is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the common

stock and the exercise price.

Subject to limited exceptions, a holder may not exercise any portion of its warrants to the extent that

the holder would beneficially own more than 9.99 % or 4.99 % (at the election of the holder) of the Company’s outstanding common stock

after exercise.

On February 8, 2024, pursuant

to the Underwriting Agreement, the Company paid Ladenburg a cash fee of 9 % of the gross proceeds received from the Offering and issued

warrants to Ladenburg to purchase up to 139,108 shares of common stock at an exercise price of $ 2.625 , subject to adjustments, which were

exercisable immediately and have substantially similar terms to the Series A warrants.

Ladenburg and its designees warrants to purchase up to an aggregate of 139,108 shares of common stock at an exercise price of $ 2.625 ,

subject to adjustments, which were exercisable immediately and have substantially similar terms to the Series A warrants.

Shares Issued for Services

5 unchanged sentences

principal, shares of the Company’s common stock.

On December 10, 2024, the Company increased the maximum aggregate offering amount

of common stock issuable pursuant to the Sales Agreement to $ 2,693,527 .

The Sales Agreement provides that Ladenburg will be entitled to

compensation for its services equal to 3.0 % of the gross proceeds from sales of any shares of common stock pursuant to the Sales

Agreement in addition to the reimbursement of certain expenses.

The Company has no obligation to sell any shares pursuant to the Sales

Agreement and either the Company or Ladenburg may terminate the Sales Agreement in accordance with its terms.

During the three and six

months ended June 30, 2025, the Company sold 941,192 and 1,270,158 shares of common stock for net proceeds of approximately

$ 1,086,000 and $ 1,512,000 , respectively, pursuant to the Sales Agreement.

Warrant Inducement Offering and Amendment to Series C Warrants

August 6, 2024, the Company extended the expiration date of the Series B warrants issued in the Offering to October 7, 2024, by entering

into an amendment to the Warrant Agency Agreement dated as of February 8, 2024 by and between the Company and the warrant agent, Equiniti

Trust Company, LLC.

On October 3, 2024, the Company extended the expiration date of the Series B warrants to November 8, 2024, by

entering into a further amendment to the Warrant Agency Agreement.

The Sales Agreement provides that Ladenburg will be entitled to compensation for

its services equal to 3.0 % of the gross proceeds from sales of any shares of common stock pursuant to the Sales Agreement in addition

to the reimbursement of certain expenses.

The Company has no obligation to sell any shares pursuant to the Sales Agreement and either

the Company or Ladenburg may terminate the Sales Agreement in accordance with its terms.

During the three and nine months ended September

30, 2025, the Company sold 733,049 and 2,003,207 shares of common stock for net proceeds of approximately $ 751,200 and $ 2,270,200 ,

respectively, pursuant to the Sales Agreement.

2024 Warrant Inducement Offering

On August 6, 2024, the Company

extended the expiration date of the Series B warrants issued in the Offering to October 7, 2024, by entering into an amendment to the

Warrant Agency Agreement.

On October 3, 2024, the Company extended the expiration date of the Series B warrants to November 8, 2024,

by entering into a further amendment to the Warrant Agency Agreement.

On November 5, 2024, the Company

7 unchanged sentences

The Series C Warrants have an exercise price of $ 1.61 per share, were exercisable

upon issuance and originally expired on the six-month anniversary of the date of issuance.

On May 2, 2025, the Company extended the expiration

date of its Series C Warrants to purchase an aggregate of 2,246,030 shares of common stock from May 6, 2025 to August 4, 2025, by entering

into an amendment with each holder of the Series C Warrants.

The Series D Warrants have an exercise price of $ 1.61 per share, were exercisable

upon issuance and expire on the five-year anniversary of the date of issuance.

Upon exercise of the Existing

Warrants, the Company issued 1,328,650 shares of its common stock while the remaining 917,380 shares (Issuable Shares) remained under

abeyance, pending issuance instructions from the Holders, pursuant to the terms of the Inducement Letters.

The Company accounted for the

issuance of the:

i) 1,328,650 shares of its common stock, ii) the Series C Warrants to purchase 2,246,030 shares of the Company’s

common stock, iii) the Series D Warrants to purchase 2,246,030 shares of the Company’s common stock, and iv) the remaining 917,380

Issuable Shares as a single equity transaction for gross proceeds of approximately $ 2.92 million at the reduced exercise price of $ 1.30

The fair value of the unissued Issuable Shares at each balance sheet date has been presented separately as issuable shares

on the condensed consolidated balance sheets and statements of stockholders’ equity.

upon issuance and originally expired on the nine-month anniversary of the date of issuance.

The Series D Warrants have an exercise price

of $ 1.61 per share, were exercisable upon issuance and expire on the five-year anniversary of the date of issuance.

The warrant inducement offering

closed on November 6, 2024.

Upon exercise of the Existing Warrants, the Company issued 1,328,650 shares of its common stock while the

remaining 917,380 shares (the Issuable Shares) remained under abeyance, pending issuance instructions from the Holders, pursuant to the

terms of the Inducement Letters.

The Company accounted for the issuance of the:

i) shares of its common stock, ii) the Series C Warrants,

iii) the Series D Warrants, and iv) the remaining Issuable Shares as a single equity transaction for gross proceeds of approximately $ 2.92

The fair value of the unissued Issuable Shares at each balance sheet date has been presented separately as issuable shares on

the condensed consolidated balance sheets and statements of stockholders’ equity.

As of September 30, 2025, all of the Issuable

Shares had been issued and no shares remained under abeyance.

In relation to the above warrant

inducement offering, the Company engaged Ladenburg as placement agent and paid cash compensation of 9 % of the gross proceeds.

the Company issued warrants to Ladenburg to purchase up to 157,223 shares of common stock at an exercise price of $ 1.625 , which were exercisable

upon issuance, expire on the five-year anniversary of the date of issuance, and have substantially similar terms to the Series C Warrants.

the Company issued Ladenburg and its designees warrants to purchase up to an aggregate of 157,223 shares of common stock at an exercise

price of $ 1.625 , which were exercisable upon issuance, expire on the five-year anniversary of the date of issuance, and other than the

foregoing terms, have substantially similar terms to the Series C Warrants.

Amendments to Series C Warrants

On May 2, 2025, the Company

extended the expiration date of its Series C Warrants to purchase an aggregate of 2,246,030 shares of common stock from May 6, 2025 to

August 4, 2025, by entering into an amendment with each holder of the Series C Warrants.

On August 4, 2025, the Company extended the expiration

date of its outstanding Series C Warrants to purchase an aggregate of 2,246,030 shares of common stock from August 4, 2025 to December

5, 2025, by entering into a second amendment with each holder of the Series C Warrants.

2025 Warrant Inducement Offering

On September 11, 2025, the

Company entered into an inducement offer letter agreement (the 2025 Inducement Letter) with a holder (the Series C Holder) of Series C

Warrants to purchase up to an aggregate of 952,380 shares of common stock.

Pursuant to the 2025 Inducement Letter, the Series C Holder

agreed to exercise for cash its Series C Warrants at a reduced exercise price of $ 1.18 per share in consideration for the Company’s

agreement to issue in a private placement new Series E common stock purchase warrants (the Series E Warrants) to purchase an aggregate

of 952,380 shares of common stock.

The Series E Warrants have an exercise price of $ 1.25 per share, will be exercisable upon the six-month

anniversary of the date of issuance and will have a term of exercise of 5.5 years from the initial exercise date.

The warrant inducement offering

closed on September 12, 2025.

Upon exercise of the Series C Warrants, the Company issued 115,000 shares of common stock while the remaining

837,380 shares (the 2025 Issuable Shares) remained under abeyance, pending issuance instructions from the Series C Holder, pursuant to

the terms of the 2025 Inducement Letter.

The Company accounted for the issuance of the:

i) shares of common stock, ii) the Series E Warrants

and iii) the remaining 2025 Issuable Shares as a single equity transaction for gross proceeds of approximately $ 1.1 million.

value of the unissued 2025 Issuable Shares has been presented separately as issuable shares on the condensed consolidated balance sheets

and statements of stockholders’ equity.

In relation to the above warrant

inducement offering, the Company engaged Ladenburg as placement agent and paid cash compensation of 9 % of the gross proceeds.

the Company issued Ladenburg and its designees warrants to purchase up to an aggregate of 66,667 shares of common stock at an exercise

price of $ 1.475 , which will be exercisable on the six-month anniversary of the date of issuance, expire on the five-year anniversary of

the date of issuance, and include piggyback registration rights that are triggered if there is not an effective registration statement

covering the resale of all of the shares issuable upon the exercise of the warrants while the warrants are outstanding.

The remaining

material terms of the warrants issued to Ladenburg and its designees are substantially similar to those of the Series E Warrants.

Warrants Classified as Liabilities

10 unchanged sentences

in the fair value reported in other income (expense) in the consolidated statements of operations.

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

As of September 30, 2025,

the Company had the following Purchase Warrants outstanding (share amounts in thousands):

Number of Shares Exercise Price Expiration Date

1 unchanged sentence

Warrants issued - June 2023 143 $ 28.00 June 2, 2028

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

The following table sets forth

changes in the fair value of the Purchase Warrants outstanding (amounts in thousands):

Number of Warrants

5 unchanged sentences

Balance as of June 30, 2025

Change in fair value of warrants

Balance as of September 30, 2025

The outstanding Purchase Warrants had no intrinsic

value at June 30, 2025.

value at September 30, 2025.

The fair value of the Purchase

Warrants at June 30, 2025 was determined using the Black Scholes model with the assumptions in the following table.

Warrants at September 30, 2025 was determined using the Black Scholes model with the assumptions in the following table.

Purchase Warrant

15 unchanged sentences

Warrants Classified as Equity

As of June 30, 2025, the Company

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

As of September 30, 2025,

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

Warrant Type Number of Shares Exercise Price Expiration

2 unchanged sentences

Series A warrants 139 $ 2.625 February 8, 2029

Series C warrants 2,246 $ 1.610 August 4, 2025

Series C warrants 1,294 $ 1.610 December 5, 2025

Series C warrants 157 $ 1.625 November 6, 2029

Series D warrants 2,246 $ 1.610 November 6, 2029

Balance as of June 30, 2025 8,770

Series E warrants 952 $ 1.250 September 12, 2031

Series E warrants 67 $ 1.475 September 12, 2030

Balance as of September 30, 2025 8,837

The outstanding equity-classified warrants had

no intrinsic value at June 30, 2025.

no intrinsic value at September 30, 2025.

Related Party Transactions

2 unchanged sentences

The Company recorded compensation expense of approximately $ 31,200

and $ 27,800 for the employed family member during the three months ended June 30, 2025 and 2024, respectively.

The Company recorded compensation

expense of approximately $ 56,100 and $ 55,300 for the employed family member during the six months ended June 30, 2025 and 2024, respectively.

and $ 30,300 for the employed family member during the three months ended September 30, 2025 and 2024, respectively.

The Company recorded

compensation expense of approximately $ 88,900 and $ 85,600 for the employed family member during the nine months ended September 30, 2025

and 2024, respectively.

Memory IC Product End-of-Life

Semiconductor Manufacturing Corporation, the sole foundry that manufactured the wafers used to produce the Company’s memory IC products,

discontinued the foundry process used to produce such wafers.

As a result, the Company commenced an end-of-life (EOL) of its memory products

In March 2025, the Company fulfilled all outstanding EOL orders for its memory IC products.

Taiwan Semiconductor Manufacturing

Corporation, the sole foundry that manufactured the wafers used to produce the Company’s memory IC products, discontinued the foundry

process used to produce such wafers.

As a result, the Company commenced an end-of-life (EOL) of its memory products in 2023.

2025, the Company fulfilled all then-outstanding EOL orders for its memory IC products.

Since March 2025, the Company received additional

purchase orders totaling approximately $ 452,800 from customers for remaining inventory.

The Company recorded approximately $ 72,000 of

product revenue from these purchase orders during the three months ended September 30, 2025.

Subsequent Events

Amendment to Series C Warrants

On August 4, 2025, the Company

extended the expiration date of its outstanding Series C Warrants to purchase an aggregate of 2,246,030 shares of common stock from August

4, 2025 to December 5, 2025, by entering into a second amendment with each holder of the Series C Warrants.

See Note 9 for additional

information about the Series C Warrants.

of Common Stock under ATM Offering Program

to June 30, 2025, the Company sold 238,049 shares of common stock for net proceeds of approximately $ 254,364 pursuant to the Sales Agreement

(see Note 8).

Issuance of Common Stock under ATM Offering

Subsequent to September 30,

2025, the Company sold 929,737 shares of common stock for net proceeds of approximately $ 1,365,976 pursuant to the Sales Agreement (see

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