{"url_path":"/sec/prso/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/890394/0001213900-26-056603-index.html","accession_number":"0001213900-26-056603","cik":"0000890394","ticker":"PRSO","issuer_name":"Peraso Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/890394/0001213900-26-056603-index.html","primary_entity_key":"0000890394","primary_entity_name":"Peraso Inc."},"word_count":1765,"has_tables":true,"body_markdown":"** **\n\n**ITEM 1A. Risk Factors**\n\n \n\nWe face many significant risks\nin our business, some of which are unknown to us and not presently foreseen. These risks could have a material adverse impact on our business,\nfinancial condition and results of operations in the future. Other than as set forth below, there have been no material changes with respect\nto the risk factors disclosed under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025,\nwhich we filed with the SEC on March 30, 2026.\n\n \n\n**We might not be able to continue as a going concern.**\n\n \n\nOur condensed consolidated financial statements as of March 31, 2026\nhave been prepared under the assumption that we will continue as a going concern for the next twelve months. As of March 31, 2026, we\nhad cash and cash equivalents of $2.7 million and an accumulated deficit of $184.4 million. We believe that our existing cash and cash\nequivalents as of March 31, 2026 and expected receipts associated with forecasted product sales will enable us to meet our capital needs\ninto the fourth quarter of 2026.\n\n \n\nOur ability to continue as\na going concern is dependent upon our ability to raise additional capital and to achieve sustainable revenues and profitable operations.\nWe will need to increase revenues substantially beyond levels that we have attained in the past in order to generate sustainable operating\nprofit and sufficient cash flows to continue doing business without raising additional capital from time to time. As a result of our expected\noperating losses and cash burn for the foreseeable future and recurring losses from operations, if we are unable to raise sufficient capital\nthrough additional debt or equity arrangements, there will be uncertainty regarding our ability to maintain liquidity sufficient to operate\nour business effectively, which raises substantial doubt as to our ability to continue as a going concern. In addition, our independent\nregistered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2025, expressed\nsubstantial doubt about our ability to continue as a going concern. If we cannot continue as a viable entity, our stockholders would likely\nlose most or all of their investment in us.\n\n \n\nIf we are unable to generate\nsustainable operating profit and sufficient cash flows, then our future success will depend on our ability to raise capital. We cannot\nbe certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit\nor other loan, will be available to us or, if available, will be on terms acceptable to us. If we issue additional securities to raise\nfunds, these securities may have rights, preferences, or privileges senior to those of our common stock, and our current stockholders\nmay experience dilution. If we are unable to obtain funds when needed or on acceptable terms, we may be required to curtail our current\nproduct development programs, cut operating costs, forego future development and other opportunities or even terminate our operations.\n\n \n\nOur forecast of the period\nof time through which our financial resources will be adequate to support our operating requirements is a forward-looking statement and\ninvolves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere\nin this “*Risk Factors*” section and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December\n31, 2025. We have based this estimate on a number of assumptions that may prove to be wrong and changing circumstances beyond our control\nmay cause us to consume capital more rapidly than we currently anticipate. Our inability to obtain additional funding when we need it\ncould seriously harm our business.\n\n \n\n**We have a history of losses, and we will\nneed to raise additional capital.**\n\n \n\nWe incurred net losses of approximately\n$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\ndeficit of approximately $184.4 million as of March 31, 2026. These and prior-year losses have resulted in significant negative cash\nflows. To remain competitive and expand our product offerings to customers, we will need to increase revenues substantially beyond levels\nthat we have attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business\nwithout raising additional capital from time to time. Given our history of fluctuating revenues and operating losses, and the challenges\nwe face in securing customers for our products, we cannot be certain that we will be able to achieve and maintain profitability on either\na quarterly or annual basis in the future. As a result, we may need to raise additional capital in the future, which may or may not be\navailable to us at all or only on unfavorable terms.\n\n \n\n34\n\n \n\n**Our evaluation of strategic alternatives,\nincluding Mobix Labs’ proposal, may not lead to a favorable outcome and could create business disruption and stock price volatility.**\n\n \n\nOn June 27, 2025, we confirmed\nin a public press release the receipt of an unsolicited non-binding acquisition proposal from Mobix Labs, which initial proposal was subsequently\nrevised by Mobix Labs, most recently on October 3, 2025. On July 11, 2025, we announced that our Board has authorized the exploration\nof strategic alternatives, including a merger, sale of assets or other similar transaction, all intended to maximize stockholder value\nand further our business operations. This process is ongoing, and our Board has not set a definitive timetable for the completion of its\nevaluation. In connection with our ongoing strategic review process, the Board is evaluating Mobix Labs’ revised unsolicited non-binding\nproposal to acquire all of our outstanding shares for $1.30 per share in cash, which we received from Mobix Labs on October 3, 2025, and\non October 30, 2025, we entered into a mutual confidentiality agreement with Mobix Labs, which contains customary terms, including mutual\n12-month standstill and non-solicitation provisions.\n\n \n\nThe process of reviewing potential\nstrategic alternatives has been and may continue to be a significant distraction for our Board and management, and has required and may\ncontinue to require the expenditure of significant time and resources by us, which may cause concern to our employees, investors, strategic\npartners, and other constituencies and may have a material impact on our business and operating results and/or result in increased volatility\nin our share price.\n\n \n\nThere can be no assurance\nthat our strategic review process will result in any transaction or other strategic outcome. Any potential transaction would be dependent\non a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest\nof third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to third parties\nin a potential transaction with us on reasonable terms.\n\n \n\nWe do not intend to disclose\nfurther developments on this strategic review process unless and until we determine that such disclosure is appropriate or necessary.\nIf we determine to engage in a transaction as a result of our exploration and evaluation of strategic alternatives, our future business,\nprospects, financial position and operating results could be significantly different than those in historical periods or projected by\nour management. Moreover, the review of strategic alternatives may disrupt our business by causing uncertainty among current and potential\nemployees, suppliers, customers and investors, and could expose us to potential litigation. The selection and execution of a strategic\nalternative may lead to similar disruptions, and parties advocating for alternatives not selected may solicit support for such other alternatives,\ncausing further disruption. Until the process is concluded, perceived uncertainties related to our future may result in the loss of potential\nbusiness opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain\nqualified personnel and business partners. Further, any alternative strategic paths that may be pursued and completed ultimately may not\ndeliver the anticipated benefits or enhance stockholder value.\n\n \n\nThe occurrence of any one\nor more of the above risks could have a material adverse impact on our business, financial condition, results of operations and cash flows.\n\n \n\n**If we are unable to satisfy the continued\nlisting requirements of Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected.**\n\n \n\nOur common stock may lose\nvalue and could be delisted from Nasdaq due to several factors or a combination of such factors. While our common stock is currently listed\non Nasdaq, we can give no assurance that we will be able to maintain compliance with the continued listing requirements of Nasdaq, including,\nbut not limited to, the corporate governance requirements and the minimum closing bid price requirement or the minimum equity requirement.\nIf we fail to maintain compliance with any such continued listing requirement, there can also be no assurance that we will be able to\nregain compliance with any such continued listing requirement in the future or that our common stock will not be delisted in the future.\n\n \n\n35\n\n \n\nIf we were to be delisted,\nwe would expect our common stock to be traded in the over-the-counter market which could adversely affect the liquidity of our common\nstock. Additionally, we could face significant material adverse consequences, including:\n\n \n\n \n●\na limited availability of market quotations for our common stock;\n\n \n\n \n●\na decreased ability to issue additional securities or obtain additional financing in the future;\n\n \n\n \n●\nreduced liquidity for our stockholders;\n\n \n\n \n●\npotential loss of confidence by customers, collaboration partners and employees; and\n\n \n\n \n●\nloss of institutional investor interest.\n\n \n\nIn the event of a delisting,\nwe can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to\nbecome listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below\nthe Nasdaq minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.\n\n \n\n**We discontinued the production of our memory\nproducts.**\n\n \n\nTaiwan Semiconductor Manufacturing\nCorporation, or TSMC, the sole foundry that manufactured the wafers used to produce our memory IC products, discontinued the foundry process\nused to produce such wafers. As a result, we commenced an end-of-life (“EOL”) of our memory products in 2023. We expect revenues\nfrom sales of our memory IC products to be minimal during 2026. The discontinuation of the production and sale of our memory IC products\nwill negatively impact our future revenues, results of operations and cash flows."}