What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-12 · 136 added, 208 removed, 238 unchanged (59% of the section changed)

36 unchanged sentences

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

With our module, we can guarantee

the performance of the amplifier/antenna interface and simplify customers’ radio frequency, or 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.

Our module is designed to

enhance the performance of the amplifier/antenna interface and simplify customers’ radio frequency (“RF”) engineering,

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

for new products.

We also had a memory product

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memory IC products.

Since March 2025, we received additional purchase orders totaling approximately $452,800 from customers for remaining

We recorded approximately $72,000 of product revenue from these purchase orders during the three months ended September 30,

Subsequent to March 2025, we received additional purchase orders and recorded revenue totaling approximately $0.5

million during the second half of 2025.

During the three months ended March 31, 2026, we received an additional purchase order and recorded

revenue totaling approximately $20,000.

We incurred net losses 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 we had an accumulated

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

$2.5 million for the three months ended March 31, 2026 and $4.8 million for the year ended December 31, 2025, and we had an accumulated

deficit of approximately $184.4 million as of March 31, 2026.

These and prior year losses have resulted in significant negative

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issued a press release publicly announcing its entry into a mutual confidentiality agreement with us.

Our board of directors is

evaluating the Company’s options to enhance stockholder value.

On January 21, 2026, Mobix

Labs issued a press release, and we filed a Current Report on Form 8-K disclosing that the Company and Mobix Labs continue to engage in

discussions regarding a potential strategic transaction and are conducting customary, confidential diligence and that Mobix Labs delivered

to the Company a non-binding indication of interest contemplating a potential all-stock transaction at a premium to the Company’s

trading price, subject to further diligence, negotiation, and the execution of definitive documentation.

Our board of directors continues

to evaluate the Company’s options to enhance stockholder value.

Our board of directors and management team are committed to acting

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Consistent with its fiduciary duties and in consultation with the Company’s financial

and legal advisors, our board of directors will carefully review Mobix Labs’ proposal to determine the course of action that it

believes is in the best interest of the Company and its stockholders.

We do not intend to make further comments regarding potential transactions

or provide any public updates regarding proposed or potential transactions, unless required by applicable law or a regulatory body.

can be no assurance that any transaction will be completed at this price or at any other price with such third party or any other third

2025 Warrant Inducement Offering

On September 11, 2025, we

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, having an original exercise price of $1.61 per

share, issued to the Series C Holder on November 6, 2024.

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 our 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, and resulted in net proceeds to us of approximately $0.9 million, after deducting placement agent fees and other

offering expenses payable by us.

Compliance with Nasdaq Minimum Bid Price Requirement

On September 5, 2025, we received

a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing

bid price of our common stock for the 30 consecutive business days ending on September 4, 2025, we no longer met the requirement to maintain

a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2).

On September 19, 2025, we received a notification

letter from Nasdaq notifying us that we had regained compliance with the minimum bid price requirement.

and legal advisors, our board of directors will continue to carefully review Mobix Labs’ proposal to determine the course of action

that it believes is in the best interest of the Company and its stockholders.

We do not intend to make further comments regarding potential

transactions or provide any public updates regarding proposed or potential transactions, unless required by applicable law or a regulatory

There can be no assurance that any transaction will be completed with Mobix Labs or any other third party.

On August 30, 2024, we entered

into an At The Market Offering Agreement (the “Sales Agreement”) with Ladenburg Thalmann & Co.

(“Ladenburg”)

with respect to an “at the market” offering program, under which we may, from time to time, in our sole discretion, issue

and sell through Ladenburg, acting as agent or principal, shares of our common stock.

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.

We have no obligation to sell any shares pursuant to the Sales

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

During the twelve months ended December

31, 2025 and 2024, we sold 3,713,939 and 251,621 shares, respectively, of common stock for net proceeds of approximately $4,351,100 and

$336,000, respectively, pursuant to the Sales Agreement.

During the three months ended March 31, 2026, we sold 2,371,943 shares of common

stock for net proceeds of approximately $2,303,484 pursuant to the Sales Agreement.

Subsequent to March 31, 2026, we have sold 2,104,742

shares of common stock for net proceeds of approximately $2,061,205 through May 12, 2026.

We currently have no amounts registered for

sale under the Sales Agreement.

We intend to file a new prospectus supplement under our existing shelf registration statement

on Form S-3 following the filing of this Quarterly Report on Form 10-Q to register additional shares of common stock for sale under the

Sales Agreement.

The amount available for sale under any such prospectus supplement will be subject to limitations under General Instruction

I.B.6 of Form S-3, which limits the aggregate market value of securities that may be sold by us during any 12-month period, as well as

market conditions and other factors.

Risks and Uncertainties

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to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2025.

As of September

31, 2026, there have been no material changes to our significant accounting policies and estimates.

Results of Operations

September 30,

Three Months Ended

Year-Over-Year Change

(dollar amounts in thousands)

Product - three months ended

Percentage of total net revenue

Product - nine months ended

Percentage of total net revenue

The following table details revenue by product

category for the three and nine months ended September 30, 2025 and 2024:

(amounts in thousands)

For the Three Months Ended September 30,

Product category

mmWave modules

mmWave other products

The following table details

revenue by product category for the three months ended March 31, 2026 and 2025:

(amounts in thousands)

For the Nine Months Ended September 30,

Three Months Ended

Year-Over-Year

Product category

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mmWave other products

Product revenue decreased

for the three and nine months ended September 30, 2025 compared with the same periods of 2024 primarily due to the decrease in our memory

IC product shipments attributable to the significant reduction in EOL shipments subsequent to March 2025.

The decreases were partially

offset by an increase in shipments of our mmWave ICs and antenna modules.

September 30,

Product revenue decreased for the three months ended March 31, 2026

compared with the same period of 2025 primarily due to the decrease in sales of our memory IC products due to the significant decrease

in EOL shipments and decreases in shipments of our mmWave ICs and antenna modules.

The decline in mmWave product shipments during the

three months ended March 31, 2026 also reflected the delayed shipment of a sizable order due to material availability constraints from

one of our suppliers, as well as subdued near-term demand from existing fixed wireless access customers.

The delayed order was shipped

subsequent to March 31, 2026.

Three Months Ended

Year-Over-Year Change

(dollar amounts in thousands)

Royalty and other - three months ended

Percentage of total net revenue

Royalty and other - nine months ended

Services and other

Percentage of total net revenue

Royalty and other revenue

Services and other revenue

includes royalty, non-recurring engineering services and license revenues.

The increase in royalty and other revenue for the three months

ended September 30, 2025 compared with the same period of 2024 was primarily due to an increase in non-recurring engineering services

revenue related to our mmWave technology attributable to a statement of work entered into in July 2025.

The decrease in royalty and other

revenue for the nine months ended September 30, 2025 compared with the same period of 2024 was primarily due to a decrease in royalty

revenues from licensees of our memory technology due to reduced shipments by these licensees, which we attribute to the discontinuation

of the foundry process by TSMC.

The increase in services and other revenue for the three months

ended March 31, 2026 compared with the same period of 2025 was primarily due to an increase in non-recurring engineering services revenue

related to our mmWave technology, partially offset by a decrease in royalties from licensees of our memory technology due to reduced shipments

by these licensees, which we attribute to the discontinuation of the foundry process by TSMC.

Cost of Net Revenue and Gross Profit

September 30,

Three Months Ended

Year-Over-Year Change

(dollar amounts in thousands)

Cost of net revenue -three months ended

Percentage of total net revenue

Cost of net revenue -nine months ended

Cost of net revenue

Percentage of total net revenue

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comprised of direct and indirect costs related to the sale of our products, including depreciation of production-related fixed assets.

and, prior to January 1, 2025, amortization of intangible assets.

Cost of net revenue decreased

for the three months ended September 30, 2025 when compared with the same period in 2024, primarily related to the decrease in product

revenue and amortization of developed technology intangible assets of approximately $0.6 million, as these assets were fully amortized

as of December 31, 2024.

Cost of net revenue decreased for the nine months ended September 30, 2025 when compared with the same period

in 2024, primarily related to the decrease in product revenue and amortization of developed technology intangible assets of approximately

$1.7 million, as these assets were fully amortized as of December 31, 2024.

September 30,

for the three months ended March 31, 2026 when compared with the same period in 2025, primarily related to the decrease in product revenue.

Three Months Ended

Year-Over-Year Change

(dollar amounts in thousands)

Gross profit -three months ended

Percentage of total net revenue

Gross profit -nine months ended

Percentage of total net revenue

Gross profit remained flat

for the three months ended September 30, 2025 compared with the same period of 2024, despite the decrease in total net revenue, primarily

due to product revenue mix, increased contribution from royalty and other revenues and sales of mmWave inventory with a cost of approximately

$0.3 million that had been written down in prior periods.

Gross profit remained relatively

flat for the nine months ended September 30, 2025 compared with the same period of 2024, despite the decrease in total net revenue, primarily

due to product revenue mix and sales of mmWave inventory with a cost of approximately $0.6 million that had been written down in prior

Gross profit decreased for the three months ended March 31, 2026 compared

with the same period of 2025, primarily due to the reduction in product revenues, partially offset by increased services and other revenues.

During the three months ended March 31, 2026 and 2025, mmWave inventory with values of approximately $182,000 and $94,000, respectively,

which was written down prior to January 1, 2026, was sold to customers.

Research and Development

September 30,

Three Months Ended

Year-Over-Year Change

(dollar amounts in thousands)

Research and development -three months ended

Percentage of total net revenue

Research and development -nine months ended

Research and development

Percentage of total net revenue

Our research and development,

or R&D, expenses include costs related to the development of our products.

We expense R&D costs as they are incurred.

The decrease for the three

and nine months ended September 30, 2025 compared with the same periods of 2024 was primarily due to:

i) reduced salary and consulting

costs, as we implemented reductions in force during 2024 and terminated consultant contracts, ii) reduced rent expense, as our San Jose

office lease expired in January 2025, and iii) reduced software license expense, as during the three and nine months ended September 30,

2024, we accrued the value of certain of our software license obligations (see Note 4 to the condensed consolidated financial statements

in Part I, Item 1 of this Quarterly Report on Form 10-Q).

or R&D, expenses include costs related to the development of our products, including facility allocations.

We expense R&D costs

as they are incurred.

We expect that total R&D

expenses will decrease during the remainder of 2025 compared with the prior period of 2024, as a result of our cost reduction initiatives.

expenses will remain flat for the remainder of 2026 compared with the prior periods of 2025.

Selling, General and Administrative

September 30,

Three Months Ended

Year-Over-Year Change

(dollar amounts in thousands)

SG&A -three months ended

Percentage of total net revenue

SG&A -nine months ended

Percentage of total net revenue

Selling, general and administrative,

or SG&A, expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, human resources and general

management and amortization of certain intangible assets.

The decrease for the three

months ended September 30, 2025 compared with the same period of 2024 was primarily attributable to reductions in expenses for facilities,

stock based compensation and amortization of purchased intangible assets for customer relationships of approximately $0.3 million, which

were fully amortized as of December 31, 2024.

The decrease for the nine months ended September 30, 2025 compared with the same period

of 2024 was primarily attributable to reductions in expenses for facilities, stock based compensation and amortization of purchased intangible

assets for customer relationships of approximately $0.8 million, which were fully amortized as of December 31, 2024.

These decreases were

partially offset by increases in consulting and professional services costs.

We expect that total SG&A expense will remain flat or

slightly decrease for the remainder of 2025 compared with 2024, as we continue to manage our SG&A costs.

Severance and Software License Obligations

September 30,

(dollar amounts in thousands)

Severance and software license obligations -three months ended

Percentage of total net revenue

Severance and software license obligations -nine months ended

Percentage of total net revenue

In November 2023, we implemented

an employee lay-off and terminated certain consulting positions (the “Reductions”) to reduce operating expenses and cash burn,

as we prioritized business activities and projects that we believe will have a higher return on investment.

As part of the Reductions,

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

During the six months ended

June 30, 2024, we determined that we would not recall any of the 11 Employees that remained on our payroll and commenced notifying the

remaining Employees that their employment would be terminated.

As a result, we recorded severance charges of approximately $0.4 million

for each of the three and six months ended June 30, 2024.

The severance liabilities were fully paid as of September 30, 2025.

As a result of the decision

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

software would not be utilized during the remaining license terms.

During the three months ended June 30, 2024, we expensed the value

of the remaining contractual liabilities and recorded liabilities of approximately $1.6 million.

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

As a result, we 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 September 30, 2025, the remaining contractual liabilities of approximately

$0.2 million were recorded in accounts payable and are expected to be paid by December 31, 2025.

months ended March 31, 2026 compared with the same period of 2025 was primarily attributable to reductions in expenses for facilities

and stock based compensation.

These decreases were partially offset by increases in consulting and professional services costs.

that total SG&A expense will remain flat or slightly decrease for the remainder of 2026 compared with 2025, as we continue to manage

our SG&A expenses.

Liquidity and Capital Resources;

Changes in Financial Condition

As of September 30, 2025,

we had cash and cash equivalents of $1.9 million and working capital of $3.1 million.

As of March 31, 2026, we had

cash and cash equivalents of $2.7 million and working capital of $4.0 million.

Net cash used in operating

activities was $4.6 million for the first nine months of 2025, which primarily resulted from our net loss of $3.5 million, as increased

by $1.7 million in net changes in assets and liabilities, and partially offset by non-cash charges of $0.2 million of depreciation and

amortization and $0.4 million of stock based compensation.

The changes in assets and liabilities primarily related to the timing of collections

of receivables, purchases of inventory and other vendor payables and prepayments.

activities was $2.3 million for the first three months of 2026, which primarily resulted from our net loss of $2.5 million, as partially

offset by non-cash charges of $0.1 million of depreciation and amortization and $0.1 million of stock based compensation.

Net cash used in operating

activities was $3.9 million for the first nine months of 2024, which primarily resulted from our net loss of $9.2 million, as adjusted

for a $1.6 million non-cash gain on the change in fair value of warrant liability, and partially offset by non-cash charges of $3.0 million

of depreciation and amortization, $3.3 million of stock based compensation and $0.6 million in net changes in assets and liabilities.

The changes in assets and liabilities primarily related to the timing of accruals for software licenses, accrued severance benefits and

accounts receivable collections, and other vendor payables and prepayments.

activities was $1.0 million for the first three months of 2025, which primarily resulted from our net loss of $0.5 million, as adjusted

for cash outflows of $0.7 million in net changes in assets and liabilities, and partially offset by non-cash charges of $0.1 million of

depreciation and amortization and $0.1 million of stock based compensation.

The changes in assets and liabilities primarily related to

the timing of collections of receivables, purchases of inventory and other vendor payables and prepayments.

Net cash used in investing

activities was approximately $79,000 for the first nine months of 2025, which was attributable to the purchase of fixed assets.

For the nine months ended

September 30, 2024, no cash was provided by or used in investing activities.

activities of approximately $0.2 million for the three months ended March 31, 2026 which was attributable to the purchase of fixed assets.

For the three months ended

March 31, 2025 no cash was provided by or used in investing activities.

Net cash provided by financing

activities of $3.2 million for the nine months ended September 30, 2025 primarily comprised $2.3 million of net proceeds from at-the-market

sales of stock and $0.9 million in net proceeds from a warrant inducement offering completed in September 2025.

activities of $2.3 million for the three months ended March 31, 2026 primarily comprised $2.3 million of net proceeds from sales of our

common stock under the Sales Agreement.

Net cash provided by financing

activities of $3.6 million for the nine months ended September 30, 2024 primarily comprised $3.4 million in net proceeds from a public

offering of our common stock and common stock purchase warrants completed in February 2024 and a $0.1 million sale of unregistered stock

to a member of our board of directors, $0.2 million of net proceeds from at-the-market sales of stock, which was partially offset by $0.1

million for repayment of finance lease liabilities.

activities for the three months ended March 31, 2025 comprised $0.4 million of net proceeds from sales of our common stock under the Sales

Agreement, partially offset by repayment of financing lease liabilities.

Our future liquidity and capital

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cost, timing and success of technology development efforts;

inventory levels, as supply chain disruption during the COVID-19 pandemic required us to maintain higher inventory levels and place purchase orders with our suppliers longer into the future, which exposes us to additional inventory risk;

timing of product shipments, which may be impacted by supply chain disruptions;

inventory levels, which may fluctuate based on supply chain conditions, customer demand patterns and the timing of supplier deliveries, and we maintain non-cancelable purchase orders with our suppliers, which exposes us to additional inventory risk if demand does not materialize as expected;

timing of product shipments, which may be impacted by supply chain disruptions experienced by us or our customers;

length of billing and collection cycles, which may be impacted in the event of a global recession or economic downturn;

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include non-cancelable purchase orders for inventory.

At September 30, 2025, we had outstanding non-cancelable purchase orders for inventory,

At March 31, 2026, we had outstanding non-cancelable purchase orders for inventory,

primarily wafers and substrates, and related expenditures of approximately $3.2 million.

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We incurred net losses 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 we

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

approximately $2.5 million for the three months ended March 31, 2026 and $4.8 million for the year ended December 31, 2025, and we had

an accumulated deficit of approximately $184.4 million as of March 31, 2026.

These and prior year losses have resulted in significant

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We expect to continue to incur

operating losses during 2025, as we do not expect any further shipments or to generate any meaningful revenue from shipments of our memory

products after March 2025, with the exception of two purchase orders received in September 2025, and as we continue to secure new customers

for and continue to invest in the development of our mmWave products.

Further, we expect our cash expenditures to continue to exceed receipts

for at least the next 12 months, as our revenues will not be sufficient to offset our operating expenses.

In addition, we have incurred

and may continue to incur substantial costs related to our strategic alternative exploration process, including our evaluation of Mobix

Labs’ proposal, which costs include the fees of our financial and legal advisors.

We believe that our existing cash and cash equivalents

as of September 30, 2025 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into

the first quarter of 2026.

operating losses during 2026, as we do not expect to generate any meaningful revenue from shipments of our remaining memory products and

as we continue to secure new customers for and continue to invest in the development of our mmWave products.

Further, we expect our cash

expenditures to continue to exceed receipts for at least the next 12 months, as our revenues will not be sufficient to offset our operating

In addition, we have incurred and may continue to incur substantial costs related to our strategic alternative exploration process,

which costs include the fees of our financial and legal advisors.

We believe that our existing cash and cash equivalents as of March 31,

2026 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the fourth quarter of

We will need to increase revenues

5 unchanged sentences

to continue as a going concern within one year from the date of issuance of our condensed consolidated financial statements.

the Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements

for the year ended December 31, 2024, expressed substantial doubt about the Company’s ability to continue as a going concern.

condensed consolidated financial statements presented in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared assuming

that we will continue as a going concern, and do not include any adjustments that might result from the outcome of this uncertainty.

can be no assurance that such additional capital, whether in the form of debt or equity financing, will be sufficient or available and,

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

We are currently seeking additional financing

in order to meet our cash requirements for the foreseeable future.

If we are unsuccessful in these efforts, we will need to implement

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

These cost reduction strategies

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

As further discussed

in Note 9 to the condensed consolidated financial statements, we completed warrant inducement offerings in September 2025 and November

2024 for net proceeds of approximately $0.9 million and $2.6 million, respectively.

Additionally, as further discussed in Note 8 to the

condensed consolidated financial statements, on August 30, 2024, we entered into the Sales Agreement with Ladenburg, pursuant to which

we may offer and sell, from time to time at our sole discretion, shares of our common stock through Ladenburg as agent and/or principal

(subject to the limitations of General Instruction I.B.6 of Form S-3) through an at-the-market program.

During the three and nine months

ended September 30, 2025, we sold 733,049 and 2,003,207 shares of common stock for proceeds of approximately $751,200 and $2,270,200

(net of commissions of approximately $23,000 and $70,000 paid to Ladenburg), respectively, pursuant to the Sales Agreement.

10, 2025, we increased the maximum aggregate offering amount of common stock issuable pursuant to the Sales Agreement to $1,750,000.

during 2023 and 2024, we implemented reductions in our workforce and eliminated 19 full-time equivalent positions.

our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December

31, 2025, expressed substantial doubt about our ability to continue as a going concern.

The condensed consolidated financial statements

presented in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared assuming that we will continue as a going concern,

and do not include any adjustments that might result from the outcome of this uncertainty.

There can be no assurance that such additional

capital, whether in the form of debt or equity financing, will be sufficient or available and, if available, that such capital will be

offered on terms and conditions acceptable to us.

We are currently selling shares of our common stock under the Sales Agreement and seeking

additional financing in order to meet our cash requirements for the foreseeable future.

If we are unsuccessful in these efforts, we will

need to implement additional cost reduction strategies, which could further affect our near- and long-term business plan.

These cost reduction

actions were intended to preserve cash, as we kept capital expenditures to minimum levels in order to reduce operating costs and our short-term

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

If we were to raise additional

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No material amounts related to these indemnifications are reflected in our condensed consolidated financial statements

for the three and nine months ended September 30, 2025.

for the three months ended March 31, 2026.

Recent Accounting Pronouncements

2 unchanged sentences

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 2. Management’s Discussion and Analysis