What changed in this filing

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Item 1A. Risk Factors

2022-03-31 compared with 2021-03-18 · 91 added, 89 removed, 249 unchanged (42% of the section changed)

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Refer also to the other information set forth in this Annual Report on Form 10-K, including in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as our Consolidated Financial Statements and the related notes in Part II, Item 15.

We have a history of losses and we expect to raise additional capital in the future.

We may not realize all of the anticipated benefits of the recent business combination.

In December 2021, we completed the Arrangement.

The success of the Arrangement will depend on, among other things, our ability to integrate the businesses of Peraso Tech and MoSys in a timely fashion.

Additionally, we may not be able to successfully achieve the level of cost savings, revenue enhancements and synergies that we expect.

If we are not able to successfully achieve these objectives, the anticipated benefits of the Arrangement may not be realized fully or at all or may take longer to realize than expected.

In addition, failure to successfully integrate the businesses in the expected timeframe may adversely affect our business, financial condition, results of operations or cash flows.

In addition, the combined operation of two businesses may be a complex, costly and time-consuming process.

The difficulties of combining the operations of the companies include, inter ali a :

• the ability of officers and directors to, as required, effectively transfer operational knowledge of

MoSys, especially the production of the MoSys products, to the new management team;

• the diversion of management attention to integration matters;

• difficulties in integrating functions, personnel, and systems;

• difficulties in assimilating employees and in attracting and retaining key personnel;

difficulties in achieving anticipated cost savings, synergies, business opportunities, and growth prospects from the combination;

challenges of managing a larger company following the Arrangement, including challenges of conforming standards, controls, procedures, and accounting and other policies and compensation structures;

• declines in our results of operations, financial condition or cash flows;

• a decline in the market price of our common stock;

• contingent liabilities that are larger than expected;

disruption of existing relationships, with existing customers, business partners, and other constituencies;

• the disruption of, or the loss of momentum in, ongoing research and development, .

Many of these factors are outside our control, and any one of them could result in increased costs, decreased expected revenues and diversion of management time and energy, which could materially impact our business, financial condition, results of operations and cash flows.

These factors could cause our operating results to suffer , decrease or delay the expected benefits of the Arrangement and negatively impact the price of our common stock.

As a result, it cannot be assured that we will realize the full benefits anticipated from the Arrangement within the anticipated time frames, or at all.

Even if the businesses are integrated, there can be no assurance that the Arrangement will result in the realization of the full benefit of the anticipated synergies and cost savings or that these benefits will be realized within the expected time frames or at all.

Difficulties in integrating the businesses could harm our reputation.

In addition, by engaging in the Arrangement, MoSys and Peraso may forego or delay pursuit of other opportunities that may have proven to have greater commercial potential.

We have a history of losses and we may need to raise additional capital in the future.

We recorded a net loss of approximately $10.9 million for the year ended December 31, 2021, and ended the period with an accumulated deficit of approximately $117.1 million.

We recorded a net loss of approximately $15.3 million for the year ended December 31, 2020, and ended the period with an accumulated deficit of approximately $106.3 million.

These and prior-year losses have resulted in significant negative cash flows and have required us to raise substantial amounts of additional capital during this period.

These and prior-year losses have resulted in significant negative cash flows.

To remain competitive and expand our product offerings to customers, we will need to increase revenues substantially beyond levels that we have attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business without raising additional capital from time to time.

Given our history of fluctuating revenues and operating losses, and the challenges we face in securing customers for our products, we cannot be certain that we will be able to achieve and maintain profitability on either a quarterly or annual basis in the future.

As a result, we expect to need to raise additional capital in the future , which may or may not be available to us at all or only on unfavorable terms.

As a result, we may need to raise additional capital in the future, which may or may not be available to us at all or only on unfavorable terms.

The full effects of COVID-19 and other potential future public health crises, epidemics, pandemics or similar events are uncertain and could have a material and adverse effect on our business, financial condition, operating results and cash flows.

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The continued spread of COVID-19 has also led to disruption and volatility in the global capital markets.

Although we were able to access the capital markets in connection with our February 2021 registered direct offering, we may be unable to access the capital markets, and additional capital may only be available to us on terms that could be significantly detrimental to our existing stockholders and to our business.

We may be unable to access the capital markets, and additional capital may only be available to us on terms that could be significantly detrimental to our existing stockholders and to our business.

We are working with our stakeholders, including customers, suppliers and employees, to address the impact of this global pandemic.

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These effects, alone or taken together, could have a material adverse impact on our business, results of operations or financial condition .

Our failure to raise additional capital or generate the significant capital necessary to expand our operations and invest in new products could reduce our ability to compete and could harm our business.

Our failure to generate the significant capital necessary or raise additional capital to expand our operations and invest in new products could reduce our ability to compe te and could harm our business.

We intend to continue spending to grow our business.

We expect to obtain additional financing to pursue our business strategy, develop new products, respond to competition and market opportunities and acquire complementary businesses or technologies.

If we do not achieve and maintain profitability, we will need additional financing to pursue our business strategy, develop new products, respond to competition and market opportunities and acquire complementary businesses or technologies.

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.

If we were to raise additional capital through sales of our equity securities, our stockholders would suffer dilution of their equity ownership, as exemplified by the substantial share dilution resulting from our February 2021 registered direct offering.

If we engage in a subsequent debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, prohibit us from paying dividends, repurchasing our stock or making investments, and force us to maintain specified liquidity or other ratios, any of which could harm our business, operating results and financial condition.

If we were to raise additional capital through sales of our equity securities, our stockholders would suffer dilution of their equity ownership.

If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, prohibit us from paying dividends, repurchasing our stock or making investments, and force us to maintain specified liquidity or other ratios, any of which could harm our business, operating results and financial condition.

If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things:

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Respond to competitive pressures or unanticipated working capital requirements.

Our future success is substantially dependent on the successful development of our Virtual Accelerator Engine IP product line, which entails significant risks.

Since the second half of 2019, our principal strategic objective has been the development of our Virtual Accelerator Engine, or VAE, software, firmware and related intellectual property, or IP, products.

We have devoted, and are continuing to devote, significant efforts and resources to this development effort.

This ongoing project involves the commercialization of new technology, will require a substantial effort during fiscal 2021 and beyond and will be subject to significant risks.

In addition to the typical risks associated with the development of technologically advanced products, this project will be subject to enhanced risks of technological problems related to the development of an entirely new category of products, substantial risks of delays or unanticipated costs that may be encountered, and risks associated with the establishment of new customer relationships.

The establishment of new customer relationships and licensing our VAE technology to such new customers will be a significant undertaking that will require us to invest in our sales team, expand our marketing activities and, at some point, change the focus of our business and operations.

Our inability to successfully conclude this development effort and establish a market for our VAE products would have a material adverse effect on our future financial and business success, including our prospects for increasing our revenues and achieving and maintaining profitability.

Our failure to success fully market our products could seriously harm our ability to execute our business strategy and may force us to curtail our research and development plans or existing operations .

Our success depends upon the acceptance by our target markets of our technologies, including our ICs and VAE IP by equipment suppliers.

Our prospective customers may be unwilling to adopt and design-in our products due to the uncertainties and risks surrounding designing a new IC and/or incorporating new IP into their systems and relying on a small, sole-sourced supplier.

Our failure to successfully market our products could seriously harm our ability to execute our business strategy and may force us to curtail our research and development plans or existing operations.

Our success depends upon the acceptance by our target markets of our products and technologies by original equipment manufacturers or OEMs.

Our prospective customers may be unwilling to adopt and design-in our products due to the uncertainties and risks surrounding designing a new IC or module and/or incorporating new IP into their systems and relying on a small, sole-sourced supplier.

Thus, currently, we do not know whether we will be able to generate adequate profit from making and selling our products and licensing our technologies.

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This strategy is designed to encourage other participants in those markets to follow these leaders in adopting our solutions.

If a high-profile industry participant adopts our ICs or IP for one or more of its products but fails to achieve success with those products, or is unable to successfully implement our ICs, or IP, other industry participants’ perception of our solutions could be harmed.

If a high-profile industry participant adopts our products for one or more of its products but fails to achieve success with those products, or is unable to successfully implement our products, other industry participants’ perception of our solutions could be harmed.

Any such event could reduce the amount of future sales of our products.

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If we do not continue to win designs in the short term, our product revenue in the following years will not grow.

We sell our ICs to OEM customers that include our ICs in their products.

Our technology is generally incorporated into products at the design stage, which we refer to as a design win, and which we define as the point at which a customer has made a commitment to build a board against a fixed schematic for its system, and this board will utilize our ICs.

As a result, our future revenue depends on our OEM customers designing our ICs into their products, and on those products being produced in volume and successfully commercialized.

If we fail to retain our current customers or convince our current or prospective customers to include our ICs in their products and fail to achieve a consistent number of design wins, our results of operations and business will be harmed.

In addition, if a current or prospective customer designs a competitor’s offering into its product, it becomes significantly more difficult for us to sell our IC solutions to that customer because changing suppliers involves significant cost, time, effort and risk for the OEM.

Even if a customer designs one of our ICs into its product, we cannot be assured that the OEM’s product will be commercially successful over time, or at all, or that we will receive or continue to receive any revenue from that customer.

We sell our ICs to OEM customers that include our ICs and modules in their products.

As a result, our future revenue depends on our OEM customers designing our products into their products, and on those products being produced in volume and successfully commercialized.

If we fail to retain our current customers or convince our current or prospective customers to include our products in their products and fail to achieve a consistent number of design wins, our results of operations and business will be harmed.

In addition, if a current or prospective customer designs a competitor’s offering into its product, it becomes significantly more difficult for us to sell our products to that customer because changing suppliers involves significant cost, time, effort and risk for the OEM.

Even if a customer designs one of our ICs or modules into its product, we cannot be assured that the OEM’s product will be commercially successful over time, or at all, or that we will receive or continue to receive any revenue from that customer.

Furthermore, the customer product for which we obtain a design win may be canceled before the product enters production or before or after it is introduced into the market.

Because of our extended sales cycle, our revenue in future years is highly dependent on design wins we are awarded today.

Our lack of capital and uncertainty about our future technology roadmap also may limit our success in achieving additional design wins, as discussed under “We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs.”

The IC design win process is generally a lengthy, expensive and competitive process, with no guarantee of revenue, and, if we fail to generate sufficient revenue to offset our expenses, our business and operating results would suffer.

Achieving a design win for one of our IC products is typically a lengthy, expensive and competitive process because our customers generally take a considerable amount of time to evaluate our ICs.

In the markets we serve, the time from initial customer engagement to design win to production volume shipments can range from two to three years, though it may take longer for new customers or markets we intend to address.

Our lack of capital and uncertainty about our future technology roadmap also may limit our

success in achieving additional design wins, as discussed under “We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs.”

The design win process for our products is generally lengthy, expensive and competitive, with no guarantee of revenue, and, if we fail to generate sufficient revenue to offset our expenses, our business and operating results would suffer.

Achieving a design win for one of our products is typically a lengthy, expensive and competitive process because our customers generally take a considerable amount of time to evaluate our products.

In the markets we serve, the time from initial customer engagement to design win to production volume shipments can range from one to three years, though it may take longer for new customers or markets we intend to address.

In order to win designs, we are required to both incur design and development costs and dedicate substantial engineering resources in pursuit of a single customer opportunity.

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The customer can make changes to its product after a design win has been awarded to us, which can have the effect of canceling a previous design win.

This occurred in 2018 when a large customer decided to phase out its use of our products.

This occurred in 2018 when a large customer decided to phase out its use of our memory products.

The delays inherent in our protracted sales cycle increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans, causing us to lose anticipated revenue.

In addition, any change, delay or cancellation of a customer’s plans could harm our financial results, as we may have incurred significant expense while generating no revenue.

If our foundr y do es not achieve satisfactory yields or quality, our cost of net revenue will increase, our operating margins will decline and our reputation and customer relationships could be harmed.

If our foundries do not achieve satisfactory yields or quality, our cost of net revenue will increase, our operating margins will decline and our reputation and customer relationships could be harmed.

We depend not only on sufficient foundry manufacturing capacity and wafer prices, but also on good production yields (the number of good die per wafer) and timely wafer delivery to meet customer demand and maintain profit margins.

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Minor deviations in the manufacturing process can cause substantial decreases in yields and, in some cases, cause production to be suspended.

Our foundry, Taiwan Semiconductor Manufacturing Company, or TSMC, from time to time, experiences manufacturing defects and reduced manufacturing yields.

From time to time, our foundries experience manufacturing defects and reduced manufacturing yields.

Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by our foundries could result in lower than anticipated manufacturing yields, which would harm our revenue or increase our costs.

For example, in the past, our foundry produced ICs and met its process specification range but did not meet our customer’s specifications causing us to write off a portion of our production lot.

For example, in the past, one of our foundries produced ICs and met its process specification range but did not meet our customer’s specifications causing us to write off a portion of our production lot.

Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time consuming and expensive to correct.

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We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs.

We aim to use the most advanced manufacturing process technology appropriate for our solutions that is available from TSMC.

We aim to use the most advanced manufacturing process technology appropriate for our solutions that is available from our foundries.

As a result, we periodically evaluate the benefits of migrating our solutions to other technologies in order to improve performance and reduce costs.

These ongoing efforts require us from time to time to modify the manufacturing processes for our products and to redesign some products, which in turn may result in delays in product deliveries.

We are dependent on TSMC to support the production of wafers for future versions of our ICs, as TSMC is our sole foundry.

Such production may require changes to TSMC’s existing process technology.

If TSMC elects to not alter their process technology to support future versions of our ICs, we would need to identify a new foundry.

In addition, our 1T-SRAM technology used in our Accelerator Engine products is not available at process nodes below 40 nanometers.

We are dependent on our foundries to support the production of wafers for future versions of our IC.

Such production may require changes to the foundry’s existing process technology.

If the foundry elects to not alter their process technology to support future versions of our ICs, we would need to identify a new foundry.

For example , our 1T-SRAM technology used in our Accelerator Engine products is not available at process nodes below 40 nanometers.

To date, we have not developed any memory products below the 40-nanometer process node and have no plans to continue the product roadmap for our Accelerator Engine products .

We do not consider this to adversely affect our current product offerings, but our inability to continue our product roadmap can adversely affect, and has in the past affected, our efforts to win new customers, secure additional design wins and significantly grow our future revenues.

If TSMC were to discontinue the foundry process used to produce our Accelerator Engine products, we would not be in a position to transition production of these products to a new foundry and continue to manufacture our products and this would require us to discontinue production of these products and would negatively impact our future revenues results of operations and cash flows.

We do not consider this to adversely affect our current product offerings, but our inability to continue our product roadmap can adversely affect, and has in the past affected , our efforts to win new customers for these products , secure additional design wins and grow our future revenues .

If Taiwan Semiconductor Manufacturing, or TSMC, which is the sole foundry for producing our memory ICs were to discontinue the foundry process used to produce our Accelerator Engine products, we would not be in a position to transition production of these products to a new foundry and continue to manufacture our products and this would require us to discontinue production of these products and would negatively impact our future revenues results of operations and cash flows.

To date, we have not achieved the anticipated benefits of a fabless semiconductor company.

Our goal has been to increase our total available market by creating high-performance ICs for networking communications, data center systems and other markets using our proprietary technology and design expertise.

Our goal has been to increase our total available market by creating high-performance ICs for mmWave, 5G, networking communications, data center systems and other markets using our proprietary technology and design expertise.

Historically, this development effort required that we add headcount and design resources, such as expensive software tools, which increased our losses from, and cash used in, operations.

Due to our limited financial resources, we were unable to sustain our IC development efforts and curtailed them in 2017.

To date, we have had limited success selling our ICs and increasing our revenue and expanding our markets.

Our efforts have been subject to various risks and uncertainties, including, but not limited to:

Due to our limited financial resources, we were unable to sustain our memory IC development efforts and curtailed them in 2017.

Our efforts to increase our revenue and expand our markets have been subject to various risks and uncertainties, including, but not limited to:

a lack of working capital;

customer acceptance;

adoption of the GCI interface, without which our Accelerator Engine products cannot function;

difficulties and delays in our product development, manufacturing, testing and marketing activities;

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Our main objective is the development and sale of our technologies to cloud networking, security, test and video system providers and their subsystem and component vendors and, if demand for these products does not grow, we may not achieve revenue growth and our strategic objectives.

We market and sell our ICs and IP to cloud networking, communications, data center and other equipment providers and their subsystem and component vendors.

We market and sell our ICs and IP to mmWave, 5G,cloud networking, communications, data center and other equipment providers and their subsystem and component vendors.

We believe our future business and financial success depends on market acceptance and increasing sales of these products.

In order to meet our growth and strategic objectives, networking infrastructure OEMs must incorporate our products into their systems and the demand for their systems must grow as well.

To meet our growth and strategic objectives, networking infrastructure OEMs must incorporate our products into their systems and the demand for their systems must grow as well.

We cannot provide assurance that sales of our products to these OEMs will increase substantially in the future or that the demand for our customers’ systems will increase.

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Also, the cyclical nature of the semiconductor industry may cause our operating results to fluctuate significantly from year-to-year.

We expect our 1T-SRAM royalty revenues to decrease compared with our historical results, and there is no guarantee revenues from our IC products will replace these lost revenues in the near future.

We are no longer actively pursuing new license arrangements for our 1T-SRAM technologies, and, as a result, our 1T-SRAM royalty may decline the production volumes of the current royalty-bearing products shipped by our licensees.

We expect our royalty revenue to decrease in 2021 and future periods.

Historically, royalties have generated a 100% gross margin, and any decrease in royalties adversely affects our gross margin, operating results and cash flows.

Our revenue has been highly concentrated among a small number of customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it.

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For the year ended December 31, 2021, our three largest customers represented approximately 81% of total revenue.

For the year ended December 31, 2019, our three largest customers represented approximately 61% of total revenue.

We expect that a relatively small number of customers will continue to account for a substantial portion of our revenue for the foreseeable future.

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We might also face credit risks associated with the concentration of our revenue among a small number of licensees and customers.

At December 31, 2020, four customers represented 79% of total trade receivables.

At December 31, 2021, four customers represented approximately 92% of total trade receivables.

Our failure to collect receivables from any customer that represents a large percentage of receivables on a timely basis, or at all, could adversely affect our cash flow or results of operations.

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However, our products are highly complex and may contain defects and failures when they are first introduced or as new versions are released.

If defects and failures occur in our products during the design phase or after, we could experience lost revenues, increased costs, including warranty and customer support expenses and penalties for non-performance stipulated in customer purchase agreements, delays in or cancellations or rescheduling of orders or shipments, product returns or discounts, diversion of management resources or damage to our reputation and brand equity, and in some cases consequential damages, any of which would harm our operating results.

our reputation and brand equity, and in some cases consequential damages, any of which would harm our operating results.

In addition, delays in our ability to fill product orders as a result of quality control issues may negatively impact our relationship with our customers.

We cannot assure you that we will have sufficient resources to satisfy any asserted claims.

Furthermore, any such defects, failures or delays may be particularly damaging to us as we attempt to establish our reputation as a reliable provider of IC and IP products.

Because we sell our IC products on a purchase order basis and rely on estimated forecasts of our customers’ needs, inaccurate forecasts could adversely affect our business.

We sell our IC products pursuant to individual purchase orders rather than long-term purchase commitments.

Furthermore, any such defects, failures or delays may be particularly damaging to us as we attempt to establish our reputation as a reliable provider of IC and module products.

Because we sell our products on a purchase order basis and rely on estimated forecasts of our customers’ needs, inaccurate forecasts could adversely affect our business.

We sell our products pursuant to individual purchase orders rather than long-term purchase commitments.

Therefore, we will rely on estimated demand forecasts, based upon input from our customers, to determine how much product to manufacture.

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For these reasons, we will generally have limited visibility regarding our customers’ product needs.

In addition, the product design cycle for networking OEMs is lengthy and it may be difficult for us to accurately anticipate when they will commence commercial shipments of products that include our ICs.

Furthermore, if we experience substantial warranty claims, our customers may cancel existing orders or cease to place future orders.

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In addition, our inability to meet customer requirements for our products could lead to delays in product shipments, force customers to identify alternative sources and otherwise adversely affect our ongoing relationships with our customers.

We depend on contract manufacturers for a significant portion of our revenue from the sale of our IC products.

We depend on contract manufacturers for a significant portion of our revenue from the sale of our products.

Many of our current and prospective OEM customers use third party contract manufacturers to manufacture their systems and these contract manufacturers purchase our products directly from us on behalf of the OEMs.

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If we are unable to persuade contract manufacturers to purchase our products, or if the contract manufacturers are unable to deliver systems with our products to OEMs on a timely basis, our business would be adversely affected.

We rely on an independent foundry and contractors for the manufacture, assembly, testing and packaging of our integrated circuits, and the failure of any of these third parties to deliver products or otherwise perform as requested could damage our relationships with our customers and harm our sales and financial results.

We rely on independent foundries and contractors for the manufacture, assembly, testing and packaging of our integrated circuits and modules, and the failure of any of these third parties to deliver products or otherwise perform as requested could damage our relationships with our customers and harm our sales and financial results.

As a fabless semiconductor company, we rely on third parties for substantially all of our manufacturing operations.

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Any disruption to the operations of these foundries and vendors resulting from earthquakes or other natural disasters could cause significant delays in the development, production, shipment and sales of our IC products.

TSMC, which manufactures our products, is located in Asia, as are other foundries we may use in the future.

Certain vendors that we utilize to manufacture our products are located in Asia, as are other foundries we may use in the future.

Our vendors that provide substrates and wafer sorting and handle the testing of our products are headquartered in either Asia or the San Francisco Bay Area of California.

Our primary manufacturing operations are located in San Jose, California.

The risk of an earthquake in the Pacific Rim region is significant due to the proximity of major earthquake fault lines.

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The COVID-19 global pandemic, along with outbreaks of new contagious diseases or the resurgence of existing diseases that significantly affect the Asia-Pacific region could disrupt the operations of our key suppliers and manufacturing partners.

Disruptions in our supply chain due to shortages in the global semiconductor business could cause delays for customers and impact revenue.

We may experience disruptions in our global semiconductor supply chain, with suppliers increasing lead times or placing products on allocation, including procuring necessary components, wafers, substrates and assembly services in a timely fashion.

As a result of these potential supply chain disruptions, we may be required to increase customer order lead times and placed some products on allocation.

We may be unable to satisfy all of the demand for our products, which may adversely affect customer relationships and impact revenue.

Price increases from our supply chain can adversely impact revenue or reduce margins.

Our suppliers can increase the price of products and services provided to us.

Finding and qualifying alternate or additional suppliers in response to increased pricing from suppliers can be a lengthy process and can lead to production delays or additional costs, and such alternatives are sometimes not available.

If we are unable to increase the price of our products to our customers in response to increased costs, we would face reduced margins.

Any claim that our products or technology infringe third party IP rights could increase our costs of operation and distract management and could result in expensive settlement costs or the discontinuance of our technology licensing or product offerings.

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We cannot be certain, however, that the waivers or limitations of liability contained in our agreements with customers will be enforceable.

Royalty amounts owed to us might be difficult to verify, and we might find it difficult, expensive and time-consuming to enforce our license agreements.

The standard terms of our 1T-SRAM license agreements require our licensees to document the manufacture and sale of products that incorporate our technology and generally report this data to us after the end of each quarter.

We have the right to audit these royalty reports periodically, although we have not conducted any such audits recently.

These audits can be expensive, time-consuming and potentially detrimental to our business relationships.

A failure to fully enforce the royalty provisions of our license agreements could cause our revenue to decrease and impede our ability to achieve and maintain profitability.

We might not be able to protect and enforce our IP rights which could impair our ability to compete and reduce the value of our technology.

Our technology is complex and is intended for use in complex ICs and networking systems.

Our technology is complex and is intended for use in complex systems.

Our licensees’ products utilize our embedded memory and/or interface technology and a large number of companies manufacture and market these products.

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We cannot be certain that we will be able to detect unauthorized use of our technology or prevent other parties from designing and marketing unauthorized products based on our technology.

In the event we identify any

past or present infringement of our patents, copyrights or trademarks, or any violation of our trade secrets, confidentiality procedures or licensing agreements, we cannot assure you that the steps taken by us to protect our proprietary information will be adequate to prevent misappropriation of our technology.

In the event we identify any past or present infringement of our patents, copyrights or trademarks, or any violation of our trade secrets, confidentiality procedures or licensing agreements, we cannot assure you that the steps taken by us to protect our proprietary information will be adequate to prevent misappropriation of our technology.

Our inability to adequately protect our IP would reduce significantly the barriers of entry for directly competing technologies and could reduce the value of our technology.

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We generally have not entered into employment or non-competition agreements with any of our employees and do not maintain key-man life insurance on the lives of any of our key personnel.

We may incur additional debt in the future.

The degree to which we are leveraged and the restrictions governing our indebtedness could have important consequences including, but not limited to:

limiting our ability to service all of our debt obligations;

impacting our ability to incur additional indebtedness or obtain additional financing in the future for working capital, capital expenditures, acquisitions or general corporate or other purposes;

increasing our vulnerability to general economic downturns and adverse industry conditions;

limiting our flexibility in planning for, or reacting to, changes in our business and our industry;

limiting our ability to engage in certain transactions or capitalize on acquisition or other business opportunities.

If we are in violation of the terms of any indebtedness in the future and do not receive a waiver, the debt holders could choose to accelerate payment on all outstanding loan balances.

If we needed to obtain replacement financing, we may not be able to quickly obtain equivalent or suitable replacement financing.

If we are unable to secure alternative sources of funding, such acceleration would have a material adverse impact on our financial condition.

Our ability to utilize our net operating loss carryforwards may be limited as a result of an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended.

Our ability to utilize our net operating loss carryforwards is limited as a result of an “ownership change,” as defined in Section 382 of the Internal Re venue Code of 1986, as amended.

As of December 31, 2021, we had over $100.0 million of net operating loss, or NOL, carryforwards for U.S.

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Securities litigation could cause us to incur substantial costs, divert management’s attention and resources, harm our reputation in the industry and the securities markets and negatively impact our operating results.

Holders of exchangeable shares are expected to experience a delay in receiving shares of our common stock from the date they request an exchange, which may affect the value of the shares the holder receives in an exchange.

Holders of exchangeable shares who request to receive shares of our common stock in exchange for their exchangeable shares will not receive shares of our common stock until several business days after the applicable request is received.

During this period, the market price of our common stock may increase or decrease.

Any such increase or decrease would affect the value of the consideration to be received by such holder of exchangeable shares upon a subsequent sale of the common stock received in the exchange

We are a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies, our common stock may be less attractive to investors.

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If we fail to maintain compliance with the continued listing requirements of the Nasdaq Stock Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

Our common stock currently trades on the Nasdaq Capital Market, or Nasdaq, under the symbol “MOSY.” This market has continued listing standards that we must comply with in order to maintain the listing of our common stock.

Our common stock currently trades on the Nasdaq Stock Market, or Nasdaq, under the symbol “PRSO.” This market has continued listing standards that we must comply with in order to maintain the listing of our common stock.

The continued listing standards include, among others, a minimum bid price requirement of $1.00 per share and any of:

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Unresolved Staff Comments

Our principal administrative, sales, marketing, support and research and development functions are located in a leased facility in San Jose, California.

We currently occupy approximately 10,000 square feet of space in the San Jose facility, and the lease extends until July 2022.

We believe that our existing facility is adequate to meet our current needs.

Legal Proceedings

The information set forth under the “Legal Matters” subheading in Note 9 (Commitments and Contingencies) of the Notes to Consolidated Financial Statements in Part II, Item 15, of this Annual Report on Form 10-K is incorporated herein by reference .

Mine Safety Disclosures

Not applicable.

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

What changed 10-K

Item 1A. Risk Factors