Item 1. Business
Item 1. Business.
Overview
We are a fabless semiconductor company focused on
the development and sale of: i) millimeter wavelength wireless technology, or mmWave, semiconductor devices and antenna modules based
on our proprietary semiconductor devices and ii) performance of non-recurring engineering, or NRE, services and licensing of intellectual
property, or IP. Our primary focus is the development of mmWave technology for wireless communications. mmWave is generally described
as the frequency band from 24 Gigahertz, or GHz, to 300 GHz. Our mmWave products, which primarily operate in the spectrum from 24 GHz
to 71 GHz, enable a range of applications including: multi-gigabit point-to-point, or PtP, wireless links with a range of up to 25 kilometers
and operating in the 60 GHz frequency band; multi-gigabit point-to-multi-point, or PtMP, links in the 60 GHz frequency band used to provide
fixed wireless access, or FWA, services; FWA in the 5G operating bands from 24 GHz to 43 GHz to provide multi-gigabit capability and low
latency connections; military communications; and consumer applications, such as high performance wireless video streaming and untethered
augmented reality and virtual reality. We also had a line of memory-denominated integrated circuits, or ICs, for high-speed cloud networking,
communications, security appliance, video, monitor and test, data center and computing markets that delivered time-to-market, performance,
power, area and economic benefits for system original equipment manufacturers, or OEMs. As discussed below, we initiated an end-of-life
of these products in 2023, and substantially fulfilled all outstanding EOL orders of our memory IC products as of March 31, 2025.
Business Combination
We were formerly
known as MoSys, Inc., or MoSys. On September 14, 2021, we and our subsidiaries, 2864552 Ontario Inc. and 2864555 Ontario Inc., entered
into an Arrangement Agreement, or the Arrangement Agreement, with Peraso Technologies Inc., or Peraso Tech, a privately-held corporation
existing under the laws of the province of Ontario, to acquire all of the issued and outstanding common shares of Peraso Tech, or the
Peraso Shares, including those Peraso Shares to be issued in connection with the conversion or exchange of secured convertible debentures
and common share purchase warrants of Peraso Tech, as applicable, by way of a statutory plan of arrangement, or the Arrangement, under
the Business Corporations Act (Ontario). On December 17, 2021, following the satisfaction of the closing conditions set forth in the Arrangement
Agreement, the Arrangement was completed, and we changed our name from MoSys to “Peraso Inc.” and began trading on The Nasdaq
Stock Market, or the Nasdaq, under the symbol “PRSO.” Certain previous shareholders of Peraso Tech elected to convert their
Peraso Tech common stock into exchangeable shares in 2864555 Ontario Inc., one of our wholly-owned subsidiaries. These exchangeable shares,
which can be converted into our common stock at the option of the holder, are similar in substance to our common stock .
Industry Trends and Market Opportunities
mmWave
Historically, virtually all wireless communications
have utilized the frequency spectrum below 6 GHz. Primary examples include cell phone communications, WiFi, Bluetooth, Internet of Things,
and more recently, broadband internet access or FWA. In parallel, a broad array of applications continues to push the boundaries of available
wireless network capacity. These include video streaming services, such as those offered by Netflix, Apple and Amazon, user-generated
video content, such as TikTok and Instagram Reels, and broadly, personal video content generated by personal mobile devices.
While the sub-6 GHz band has traditionally been sufficient
for these services, with growing demand, the mmWave spectrum is an additional source of wireless capacity. Wireless spectrum is an extremely
valuable commodity and is highly regulated by federal governments around the world. Spectrum is broadly segmented into either licensed
frequencies or unlicensed frequencies, although most frequencies are licensed. The mmWave frequencies between 24 GHz and 100 GHz include
both licensed and unlicensed spectrum. In the case of mmWave, the 3rd Generation Partnership Project, or 3GPP, has included the spectrum
from 24 GHz to 43 GHz in its 5G specification. This is licensed spectrum in most jurisdictions around the world, and carriers must license
this spectrum if they choose to utilize the mmWave frequency bands within that spectrum. Alternatively, the spectrum from 57 GHz to 71
GHz is generally unlicensed around the world, and, therefore, a license is not required to operate in this spectrum. To that end, the
Institute of Electrical and Electronics Engineers, or IEEE, has established two standards which utilize this unlicensed mmWave spectrum,
IEEE 802.11ad and IEEE 802.11ay. We have developed silicon products that comply with both the licensed and unlicensed standards.
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In an August 2024 report titled, Millimeter Wave
Technology , Allied Market Research valued the global mmWave technology market at $3.4 billion, and forecasted it to grow at a 20%
compound annual growth rate from 2024 to 2032.
IEEE 802.11ad/ay: License-Free mmWave Market
A primary opportunity for our mmWave products in unlicensed-band
applications is the FWA market. In this market segment, wireless Internet service providers, or WISPs, provide their customers with a
fixed wireless link to a base station or small cell, thus providing the customer with high-speed access to the Internet. mmWave can provide
both upload and download speeds of over 1 Gbps. In addition, we believe mmWave is generally a much less expensive alternative to installing
underground fiber optic cable and provides FWA carriers with competitive and cost advantages compared to other access technologies, such
as cable broadband. From an equipment perspective, the FWA worldwide market has historically been serviced by OEMs, such as Ubiquiti Inc.,
or Ubiquiti, Cambium Networks, Ltd. and SIA MikroTik. Generally, WISPs address segments of the broadband market either not served or underserved
by the traditional carriers, such as rural markets.
The FWA market has been helped in recent years with
the advent of government incentives aimed at closing the so-called ‘digital divide’ between urban and rural broadband access.
In 2023, the U.S. government established the Broadband Equity, Access, and Deployment, or BEAD, program, which allocated $42.45 billion
to expand high-speed Internet access by funding planning, infrastructure deployment and adoption programs in all 50 states. The National
Telecommunications and Information Administration, or NTIA, is the agency responsible for administering the BEAD program. When initially
introduced, the NTIA had originally provided guidance that BEAD funding would be prioritized for primarily fiber deployments, and
that alternative technologies such as unlicensed fixed wireless were not eligible for BEAD program funding. During 2025,
the NTIA espoused a shift to a technology-neutral approach including all forms of FWA, including services enabled by our 60GHz mmWave
wireless technology.
A related opportunity for us in the license-free FWA
space is dense urban markets, many of which have a high saturation of informal settlements. In a December 2023 report, the International
Telecommunications Union, or ITU, reported that an estimated 2.6 billion people, or one-third of the global population, does not have
Internet access. As of August 2023, the World Economic Forum estimated there were over 1.1 billion people living in informal settlements
around the world. Traditional last mile technology, such as WiFi, is not able to handle the congestion generated by the dense concentration
of users in such communities. This is because WiFi radio signals spread out in all directions, much like a light bulb. Due to the very
high population density in informal settlements, numerous WiFi transmitters are required, and as such, tend to cancel each other out with
overlapping signals. Because our mmWave technology utilizes beamforming, the signals are more like beams from a car headlight, very narrow
and controlled. Therefore, in a dense environment, mmWave is much better at handling high congestion, as the radio signals generally do
not overlap. Another advantage our mmWave technology provides in the dense urban environment is reduced power consumption. The power grid
in an informal settlement can often be unreliable. Our technology can operate under 12 watts, which enables communications networks to
continue to operate on a backup battery power supply for several hours.
An additional market for our 60GHz mmWave products
is military applications requiring secure communications. Specifically, as a result of our radio frequency, or RF, beamforming and beamsteering
capabilities, militaries and defense contractors are evaluating the use of mmWave for stealth tactical communications. Unlike traditional
wireless technology that radiates equally in all directions (omni), mmWave technology utilizes phased-array RF beams to focus the RF energy
into a specific intensity and direction. The military views mmWave as an inherently stealthy protocol – Low Probability of Interception
(LPI)/Low Probability of Detection (LPD)/Anti-Jamming (AJ). As the 60GHz spectrum band is generally unlicensed around the world, these
communications will not interfere with locally licensed spectrum, providing additional benefit. Also, as our devices operate at under
12 watts, a light battery can be used for simple deployment in field deployments and combat settings. Further, as our mmWave technology
can support gigabit speeds, military personnel are able to transmit and receive information in a timely manner. Our lead defense contractor
customer is using our mmWave technology in an Identification Friend or Foe, or IFF, system designed to operate in highly contested electronic
warfare environments. Our customer’s IFF system enables secure identification between and amongst ground forces and between ground
forces and drones, allowing counter-drone systems and battlefield operators to determine whether aerial platforms are friendly or hostile.
At the core of the customer’s system, our 60 GHz beamforming wireless transceivers provide the communications backbone for highly
directional, low-power links that reduce the likelihood of detection or interception, making them well suited for dense electronic warfare
environments.
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Our 60 GHz products can also be applied to consumer
applications, as we believe our technology can provide key advantages to this market. For example, we are targeting the high-performance,
video-streaming market, specifically the virtual reality, or VR, market. Uses of VR are envisioned in a broad variety of markets, including
gaming, real estate, healthcare, and transportation. We believe that our mmWave technology has certain characteristics that are ideal
for VR applications. First, mmWave’s high data rate of 3 Gbps supports high-resolution displays. Second, our proprietary beamforming
and beamtracking techniques keep latency to under 5 milliseconds, or ms, so the user does not experience lags. Third, mmWave technology
is less susceptible to interference and, as mentioned above in the context of dense urban environments, can operate in highly congested
environments, which limits interruptions in the VR user’s experience.
Other market opportunities for 60 GHz mmWave technology
include transportation safety, factory automation, and railway communications.
3GPP: Licensed mmWave Market
The frequency band from 24 GHz to 43 GHz has been
designated as the mmWave band in 5G communications. In the United States, this band is generally licensed to carriers by the FCC for expensive
license fees that can reach billions of dollars. Carriers license this spectrum to ensure there is no interference from other carriers
using the same frequencies. We believe that the primary benefit of mmWave to carriers is the availability of additional spectrum within
the licensed band, to provide additional capacity to handle the growth of mobile users.
Our initial target for licensed-band applications
is the FWA segment, as carriers can utilize the additional network capacity offered by mmWave to provide FWA services. According to the
Ericsson Mobility Report , as of November 2023, approximately 80% of mobile service providers have an FWA offering and 121 service
providers offer FWA services over 5G, representing 50% of all FWA service providers. According to Mobile Experts Inc.’s report,
5G Millimeter Wave 2023 , mobile operators that have deployed 5G mmWave include Verizon, T-Mobile, AT&T, NTT DoCoMo, KDDI, Softbank
and Rakuten Mobile. We believe major Chinese mobile carriers have commenced formal collaborations to advance mmWave solutions in the Chinese
telecom market. Regarding U.S. carriers, FWA has become a bright spot for their 5G roll out. While U.S. carriers currently use the sub
6 GHz frequency band, eventually, as the network gets saturated, we believe the carriers will commence a broad roll out of mmWave technology.
In terms of FWA market potential in the U.S., according to Fierce Wireless, T-Mobile is available to over 50 million homes, and Verizon
is available to over 40 million homes. In addition to being used to provide FWA services, our mmWave antenna modules can be utilized in
consumer-premises equipment or CPE, including hotspots, laptops and tablets. In its report, 5G Millimeter Wave 2023 , Mobile Experts
Inc. forecasts a total volume of approximately 2 million mmWave-enabled CPE units by 2026.
5G mmWave has support from major industry players,
such as Apple, which has incorporated mmWave wireless into substantially all versions of the iPhone for sale in the U.S. market. The basic
premise is the ever-increasing demand for bandwidth. The initial use case for cellular service providers is to provide their customer
base (primarily smart-phone customers) with continuity of network access in highly congested environments, such as sporting events, public
beaches, music festivals or generally any large gathering where thousands of users are attempting to access the network simultaneously.
We believe that mmWave will gain universal acceptance, as users will demand full continuity in terms of network access, and we are well
positioned to address the mobile opportunity for mmWave, which is expected to present an order of magnitude increase in the total available
market.
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Our Products
Our primary focus is the development, marketing and
sale of our mmWave products.
mmWave ICs
Currently, there are two industry standards that incorporate
mmWave technology for wireless communications: (i) license-free: IEEE 802.11ad/ay and (ii) licensed: 3GPP Release 15-17 (commonly referred
to as 5G). We have developed and continue to develop products that conform to these standards. To date, we have not sold any 5G products,
as our primary business focus remains license-free markets.
Our first mmWave IC product line operates in the license-free
60 GHz band and conforms to the IEEE 802.11ad standard. This product line includes a baseband IC, several variations of mmWave radio frequency,
or RF, ICs, and associated antenna technology.
Our 60 GHz IEEE802.11ad products have two very important
advantages over traditional 2.4 GHz / 5 GHz Wi-Fi products: very high data rates (up to 3.0 Gbps) and low latency, i.e., less than 5 ms.
The first application that had traction was outdoor broadband, including applications such as PtP backhaul links or FWA using PtMP links.
As the spectrum is unlicensed (free), wireless Internet service providers, or WISPs, can provide services without having to procure expensive
wireless spectrum licenses. We believe that our mmWave technology can be deployed quickly and cost effectively in rural and suburban environments,
including in remote and low-income regions where residents often have poor Internet quality. While carriers can provide fiber access,
the cost of fiber deployment can be prohibitive and trenching for fiber is time consuming and can limit the rate at which new subscribers
are added. Our mmWave products enable WISPs to deploy broadband service using low-cost terminals and infrastructure, while avoiding the
costs of deploying cable or fiber.
We are a leading supplier of semiconductors in the
mmWave PtP and PtMP markets. We are currently shipping to leading equipment suppliers in this space, as well as directly to service providers
that are building their own equipment. We believe we bring certain advantages to the market, including our products supporting the spectrum
from 66 GHz to 71 GHz, which is often referred to as channels 5 and 6 in the 802.11ad/ay specifications. The key advantage in supporting
these channels is that the signals are able to propagate much further than channels 1 through 4; this is a result of significantly lower
oxygen absorption at frequencies above 66 GHz. To date, our FWA customers have achieved links in the range of 25 kilometers, which we
believe is industry-leading.
In the indoor area, the 802.11ad technology is ideal
for high-speed, low-latency video applications, and our products can support 3Gbps links with under 5 ms of latency. Representative applications
include:
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AR/VR links between the headset and the video console;
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USB video cameras for corporate video conferencing;
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wireless security cameras; and
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smart factory safety and surveillance.
Our mmWave ICs have been in volume production since
2018. A core competency of the Company is phased-array technology, or beamforming, in which an array of antenna elements work in unison
to create a focused RF beam. Through adjustment of the relative phase of the antenna signals, the beams can be directed to support robust
wireless connection. We are a leader in the production of mmWave devices and have pioneered a high-volume mmWave production test methodology
using standard low-cost production test equipment. It has taken us several years to refine performance of this production test methodology,
and we believe this places us in a leadership position in addressing the operational challenges of delivering mmWave products into high-volume
markets.
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Our second product line addresses the 5G mmWave opportunity.
In its 4G-5G FWA Survey 2024 issued in August 2024, the Global Mobile Supplier Association reported that 5G mmWave FWA was ramping
and that shipments of 5G devices with mmWave capability are expected to grow 22% in 2024, while still representing less than 10% of all
5G device shipments. Given our extensive experience in the development of mmWave technology, 5G mmWave is a logical adjacent and larger
market. We have sampled a highly integrated 5G mmWave beamformer IC, which operates in the 24 GHz to 43 GHz frequency range. The device
supports dual-stream multiple input, multiple output, or MIMO, with two 16-channel beamforming arrays.
mmWave Antenna Modules
We produce and sell complete mmWave antenna modules for license-free
60 GHz applications. The primary advantage provided by our antenna modules is that our proprietary mmWave ICs and the antenna are integrated
into a single device. A differentiating characteristic of mmWave technology is that the RF amplifiers must be as close as possible to
the antenna to minimize loss. Our module is designed to enhance the performance of the amplifier/antenna interface and simplify customers’
RF engineering, facilitating more opportunities for customer prospects that have not provided RF-type systems, as well as shortening the
time to market for new products. It is possible for third parties to provide competitive module products, but, because we utilize our
mmWave ICs and incorporate our proprietary mmWave antenna IP, we can provide a highly-competitive solution based on our internally-owned
and developed module components.
Our PERSPECTUS family of mmWave antenna modules enable
WISPs to offer high-capacity FWA networks in the unlicensed 60-GHz spectrum. The PERSPECTUS product family includes our integrated 60
GHz mmWave antenna modules and enhanced software for PtMP FWA applications. Our PERSPECTUS products allow rapid development of low-cost
network equipment utilizing over 14 GHz of spectrum to provide multi-gigabit access services. Leveraging our integrated phased-array antennas
and operating in the upper channels of the band, link ranges from 1.5 kilometers up to extended ranges of 30 kilometers can be achieved
using a parabolic reflector.
Additionally, we have established an innovative user
arbitration protocol called DUNE that is specifically designed to optimize network performance in dense urban environments using our PERSPECTUS
antenna modules. DUNE is a result of our decade-long experience in mmWave technology and in-house development of the intellectual property
incorporated in media access control, which controls the hardware, the physical layer, which controls the physical connection and software
drivers, as well as novel antenna designs and beamforming algorithms. DUNE takes a multi-level approach to reducing contention and interference
by incorporating both physical, e.g. antenna and beamforming, and protocol-level innovations.
Memory
We had a memory product line comprising our Bandwidth Engine ICs, which
are memory-denominated ICs that were designed to be i) high-performance companion ICs to packet processors and ii) targeted for high-performance
applications where throughput is critical. Taiwan Semiconductor Manufacturing Corporation, or TSMC, the sole foundry that manufactured
the wafers used to produce our memory IC products, discontinued the foundry process used to produce such wafers. As a result, in May 2023,
we initiated an end-of-life, or EOL, of our memory IC products, and fulfilled all outstanding EOL orders of our memory IC products in
March 2025. Subsequent to March 2025, we received two additional purchase orders for our remaining inventory which were fulfilled in the
third and fourth quarters of 2025 for total revenues to us of approximately $0.5 million. We may receive additional purchase orders
for our remaining inventory, but we do not expect to generate any significant revenue from shipments of our remaining memory IC products
after the quarter ended December 31, 2025.
Research and Development
Our ability to compete in the future depends on successfully
improving our technology to meet the increasing demand for higher performance and lower cost solutions. Development of new IC products
requires specialized chip design and product engineers, expensive computer-aided design software licenses, and significant fabrication
and testing costs, including mask costs.
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We have over 15 years of technical know-how in the
design and manufacturing of mmWave technology. The most important aspect of this knowledge is knowing how mmWave circuits will perform
in a real-world environment. Traditionally, semiconductor design utilizes sophisticated computer-aided design software to simulate the
performance of a device that is manufactured at a specific semiconductor manufacturing plant. However, mmWave is extremely difficult to
model precisely. Therefore, the only path to understand how well a device will perform is to produce the device and test it in a real-world
application. Over the last decade, many companies have attempted to develop mmWave semiconductor devices, however, given that the devices
had inconsistent or weak performance, a number of the companies were unsuccessful and abandoned their design and product development efforts.
As an example of our leadership and expertise in the development of mmWave technology, we were an active participant in the development
of the IEEE 802.11ay wireless specification and, to date, have been granted nine essential claims patents with respect to this standard.
At a system level, there are additional technical
challenges presented by mmWave technology that we have overcome and form a key part of our internal know-how. For example, a key technology
of mmWave is the concept of beamforming and beam steering using a phased-array antenna. This technology is utilized to concentrate the
RF energy into a narrow beam to improve the range and coverage of mmWave devices. We have developed effective beamforming and beam steering
technology for phased-array circuits and antennas. While there are many academic examples of successful phased-array implementations,
there is a vast barrier between a “laboratory” version of phased-array technology and a version that is deployed for commercial
use. One such aspect is the implementation of the beamforming procedure, which seeks to maximize throughput and do so while not impacting
latency. While the details of achieving this are complex, it is important-intellectual property that we have gained through real-world
experience.
mmWave is not without challenges, as mmWave signals
do not typically travel as far as traditional wireless signals and are more attenuated by solid objects. Mitigation strategies must be
deployed, particularly with regard to the management of signal propagation. Whereas traditional wireless devices utilize a broad, omni-antenna
pattern, mmWave systems rely on phased-array technology, which focusses the radio signal into a narrow beam to improve propagation characteristics.
We consider ourselves to be a global leader in implementing these sophisticated radio systems and one of the few providers in the market
successfully shipping phased-array devices in mass production.
While we have developed products for the 60 GHz and 5G mmWave markets,
we believe there are other market opportunities that could utilize mmWave technology. For example, at the IEEE there is a pending proposal
to utilize mmWave technology in future versions of an IEEE standard. We believe this proposal is primarily driven by the anticipated use
of mmWave to support VR applications, which require very high data rates, and to reduce congestion in multi-dwelling units. In the mobile
carrier market, there is some early research in the use of terahertz technology to make even more spectrum available for network capacity.
While the proposed frequencies are higher than mmWave (above 100 GHz), we believe that many of our technological developments, particularly
our beamforming and beamsteering concepts, can be applied to terahertz technology.
With regard to our memory products, we have ceased
and do not intend to expend any development efforts or funds to develop new memory products. Our memory IC products will not provide us
with meaningful revenue and gross margin contributions after December 31, 2025, as we completed the EOL of these products during 2025.
We intend to continue to devote substantially all of our research and development efforts toward further expanding our mmWave technology
portfolio and expanding our product offerings.
Sales and Marketing
In addition to our direct sales personnel, we sell through sales representatives
and distributors in the United States, Africa, Asia and Europe. Our distributors have a global presence with offices and technical selling
and applications engineering capabilities, which we believe will enable us to reach new potential customers for our products.
We also have applications engineers who support our
customer engagements and engage with the customers’ system architects and designers to propose and implement our products and solutions
to address system design challenges and improve performance.
In the markets we serve, the time from a design win
to production volume shipments of our IC products can range from 12 to 36 months. We believe that our customer systems can have a product
life from a few years to up to 10 years once products like ours have been designed into the system. Historically, our revenue has been
highly concentrated, with a few customers accounting for a significant percentage of our total revenue.
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In the FWA market, our primary customer base is OEMs, but we also have
multiple WISP customers primarily located in Africa. Our OEM customers in the fixed wireless space include Ubiquiti, WeLink, which prior
to 2024 operated as both an OEM and a WISP, and Tachyon Networks, or Tachyon. Ubiquiti, an OEM in the unlicensed fixed wireless space,
relies on us as its sole source mmWave IC supplier for its Wave products. Historically, WeLink relied on us as its sole source
supplier for WeLink-designed equipment used to deliver WISP residential service since 2022; however, in 2024, WeLink’s hardware
business was launched as a separate entity, Ketsen Networks, or Ketsen. WeLink currently deploys 60 GHz technology in multiple U.S. cities,
including Las Vegas, Dallas and Los Angeles. We expect to continue to supply our antenna modules to both WeLink and Ketsen. Tachyon utilizes
our mmWave antenna modules in its TNA-30X family of PtP and PtMP solutions for 60 GHz unlicensed FWA networks. In addition to OEMs, we
have partnered with several WISPs in Africa that have deployed our 60 GHz technology. We continue to focus on securing new OEM and WISP
customers.
During the year ended December 31, 2025, five customers
accounted for 10% or more of our net revenues, including UI Limited at 29% and F5/Flextronics, Tachyon and Alltek at 13% each and Ikeja
at 12%. During the year ended December 31, 2024, two customers accounted for 10% or more of our net revenues, including Nokia Corporation
at 25% and F5/Flextronics at 61%.
Intellectual Property
We regard our patents, copyrights, trademarks, trade
secrets and similar intellectual property as critical to our success and rely on a combination of patent, trademark, copyright, and trade
secret laws to protect our proprietary rights.
As of December 31, 2025, we held 72 United States patents and 16 foreign
patents on various aspects of our mmWave, antenna, memory and other technology, with expiration dates ranging from 2026 to 2041. We also
held 8 pending patent applications in the United States and abroad. There can be no assurance that others will not independently develop
or patent similar or competing technology or design around any patents that may be issued to us, or that we will be able to successfully
enforce our patents against infringement by others.
We were also an active participant in the development
of the IEEE 802.11ay wireless specification and, to date, have been granted nine essential claims patents with respect to this standard.
Essential claims patents are of particular value as a specification cannot be implemented without obtaining a license to the patents from
us.
The semiconductor industry is characterized by frequent
litigation regarding patent and other intellectual property rights. Our IC customers, licensees or we might, from time to time, receive
notice of claims that we have infringed patents or other intellectual property rights owned by others. Our successful protection of our
patents and other intellectual property rights and our ability to make, use, import, offer to sell, and sell products free from the intellectual
property rights of others are subject to a number of factors, particularly those described in Part I, Item 1A, “Risk Factors.”
Competition
mmWave
mmWave circuit and system design is a highly specialized
engineering skill, as mmWave is a challenging technology to ship in mass production. At frequencies above 24 GHz, circuits are extremely
vulnerable to small variances in the semiconductor manufacturing process. Designing circuits that minimize susceptibility to these variances
takes years of development, and we believe we are one of the few companies in the world that is skilled in mmWave design. Further, we
have shipped mmWave devices in volume, and ensuring all devices sold adhere to strict performance standards is a core competency we have
developed. In addition, we have developed our own mmWave phased-array antenna technology, which allows us to be highly competitive in
terms of overall system cost. Our customers do not need to engage with third-party antenna suppliers, thus eliminating the additional
cost for a third-party antenna.
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Unlicensed IEEE 802.11ad/ay Market:
Historically, our primary competitor in the IEEE802.11ad/ay
market has been Qualcomm. The primary benefit that we provide to the market is the support of the higher frequency bands from 66 GHz to
71 GHz. The advantage at these frequencies is that oxygen attenuation is significantly reduced, and signals can travel much further.
We also have key points of differentiation compared
to Qualcomm for wireless video devices. We are well positioned in this market, as we have USB 3.0 built into our devices, so our products
generally support USB architectures. A prime example is the replacement of the USB cable with a wireless version using our technology.
There are many applications where this can be of use, including USB web cams, wireless displays, and AR/VR headsets. We have invested
significant software resources into providing the market with wireless USB solutions, and we believe there is no other mmWave vendor in
the world that can offer multi-gigabit solutions as a replacement for wired USB.
Licensed 5G Market:
With 5G, our efforts are focused on the mmWave RF
front-end phased-array component of the system. The 5G product instantiation is an RF module utilizing our proprietary intellectual property.
Key elements of our mmWave intellectual property include:
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RF circuits;
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phased-array antenna; and
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in-system circuit calibration, beam forming, and real-time system monitoring.
From a competitive perspective, we believe we are
currently the only pure-play, 5G vendor to offer a dual-band (28/39 GHz) RF solution for the FWA market. Qualcomm does offer a 5G RF solution
for the FWA market, however its solution is based on aggregating its mobile RF solution, which we believe requires several compromises
in terms of cost, performance, and power consumption. With an initial focus on FWA, we can derive advantages by optimizing our silicon
for that specific market. Furthermore, we have achieved traction in the unlicensed, 60 GHz, FWA market, and we believe we will be able
to transfer all of our knowledge gained from the 60 GHz market to the 5G market. However, this market opportunity is more competitive,
and potential competitors, in addition to Qualcomm, include MediaTek Inc. and Samsung Electronics Co., Ltd.
Manufacturing
We depend on third-party vendors to manufacture, package,
assemble and test our IC and module products, as we do not own or operate a semiconductor fabrication, packaging or production testing
facility. By outsourcing manufacturing, we can avoid the high cost associated with owning and operating our own facilities, allowing us
to focus our efforts on the design and marketing of our products.
We perform an ongoing review of our product manufacturing
and testing processes. Our IC products are subjected to extensive testing to assess whether their performance meets design specifications.
Our test vendors provide us with immediate test data and the ability to generate characterization reports that are made available to our
customers.
Employees
As of December 31, 2025, we had 42 employees, including
9 located in the United States and 33 located in Canada. Our headcount comprised 31 in research and development and manufacturing-related
operations and 11 in sales, marketing and general and administrative functions. We believe our current headcount is adequate to conduct
our business.
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Available Information
We were founded in 1991 and reincorporated in Delaware
in 2000. Our website address is www.perasoinc.com. The information in our website is not incorporated by reference into this report. Through
a link on the Investor section of our website, we make available our annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as
soon as reasonably practicable after they are filed with, or furnished to, the SEC. You can also read any materials submitted electronically
by us to the SEC on its website (www.sec.gov), which contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, including us.