Peraso Inc.: Form 10-Q for the period ended Jun 30, 2026

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying condensed consolidated financial statements and notes included in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which include, without limitation, statements about the market for our technology, our strategies, competition, expected financial performance and capital raising efforts. Any statements about our business, financial results, financial condition and operations contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects” or similar expressions are intended to identify forward-looking statements. Our actual results could differ materially from those expressed or implied by these forward-looking statements as a result of various factors, including the risk factors described under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 and the risk factors described below under Part II, Item 1A of this Quarterly Report on Form 10-Q. We undertake no obligation to update publicly any forward-looking statements for any reason, except as required by law, even as new information becomes available or events occur in the future.

Overview

Our strategy and primary business objective is to be a profitable, IP-rich fabless semiconductor company offering integrated circuits, or ICs, antenna modules and related non-recurring engineering services. We specialize in the development of mmWave semiconductors, primarily in the unlicensed 60 GHz spectrum band for 802.11ad/ay-compliant devices and in the 28/39 GHz spectrum bands for 5G-compliant devices. We derive our revenue from selling semiconductor devices, as well as antenna modules based on using those mmWave semiconductor devices. We have pioneered a high-volume mmWave IC 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. We also produce and sell complete mmWave antenna modules. 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’ 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.

Our integrated mmWave solutions provide secure, low-latency, high-capacity connectivity for applications spanning fixed wireless access, defense, public safety, mobility, industrial networking, and autonomous systems. In recent quarters, we have been focused on addressing market opportunities for the rapidly expanding requirements of unmanned aerial vehicles (“UAV”), including drones, autonomous systems, and defense communications applications. In 2025, we secured our first defense application with a customer for a drone identification friend or foe (“IFF”) system designed to operate in highly contested electronic warfare environments. Since then, we have expanded our initial engagement with this customer for an IFF application for personnel-mounted systems to IFF applications for our module products for drones. We have also been engaged with another customer for applications for autonomous vehicles and drone swarms. We believe the autonomous, UAV and defense communications markets represent a significant market opportunity for us.

We also had a memory product line comprising our Bandwidth Engine IC products. 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, in March 2025, we fulfilled all then-outstanding EOL orders for our memory IC products. In the second half of 2025, we fulfilled two purchase orders for revenue totaling approximately $0.5 million. During the six months ended June 30, 2026, we fulfilled two additional purchase orders for revenue totaling approximately $27,000.

We incurred net losses of approximately $4.7 million for the six months ended June 30, 2026 and $4.8 million for the year ended December 31, 2025, and we had an accumulated deficit of approximately $186.6 million as of June 30, 2026. These and prior year losses have resulted in significant negative cash flows and historically have required us to raise substantial amounts of additional capital. As discussed below, this raises significant doubt about our ability to continue as a going concern. 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.

Recent Developments

Strategic Initiatives

We received an unsolicited, non-binding proposal from Mobix Labs, Inc.(“Mobix”) to acquire the Company, as described in our Annual Report on Form 10-K for the year ended December 31, 2025 and Current Report on Form 8-K filed with the SEC on January 21, 2026. There have been no further developments since that time. As initially disclosed in July 2025, our board of directors authorized the exploration of strategic alternatives, including a merger, sale of assets or other similar transaction, all intended to maximize stockholder value and further our business operations. There can be no assurance that any transaction will result from our evaluation of strategic alternatives.

ATM Offering

On August 30, 2024, we entered into an At The Market Offering Agreement (the “Sales Agreement”) with Ladenburg Thalmann & Co. Inc. (“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 three months ended June 30, 2026, we sold 2,449,681 shares of common stock for net proceeds of approximately $2,364,376 (net of commissions paid to Ladenburg of approximately $73,591) pursuant to the Sales Agreement. Subsequent to June 30, 2026, we sold 23,797 shares of common stock for net proceeds of approximately $20,901 pursuant Sales Agreement. See Note 7 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding the terms of the Sales Agreement.

Committed Equity Facility

On June 30, 2026, we entered into a Common Stock Purchase Agreement, as amended by a letter agreement dated July 10, 2026 (as amended, the “Purchase Agreement”), and a related Registration Rights Agreement with Roth Principal Investments, LLC (“Roth Principal Investments”), pursuant to which Roth Principal Investments has committed to purchase up to $25.0 million of shares of our common stock from time to time, at our discretion, over a 36-month period, subject to the terms and conditions set forth in the Purchase Agreement. The Purchase Agreement includes an exchange cap of 3,004,114 shares (the “Exchange Cap”) on the number of shares issuable to Roth Principal Investments, representing 19.99% of our shares of common stock outstanding immediately prior to execution of the Purchase Agreement. The Exchange Cap will not apply if either (i) we obtain stockholder approval to issue shares in excess of the Exchange Cap or (ii) the average price per share paid by Roth Principal Investments for all shares purchased under the Purchase Agreement equals or exceeds $0.9853, in each case in accordance with Nasdaq Listing Rule 5635(d). We intend to seek stockholder approval to remove the Exchange Cap. We are under no obligation to sell any shares under the Purchase Agreement. The registration statement registering the resale of shares issuable under the Purchase Agreement was declared effective by the SEC on July 14, 2026. See Note 7 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding the terms of the Purchase Agreement.

Risks and Uncertainties

We are subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, tariffs, pandemics, wars and acts of terrorism and the volatility of public markets. 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.

For additional information on risks that could impact our future results of operations, please refer to “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of these condensed consolidated financial statements requires us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis we make these estimates based on our historical experience and on assumptions that we consider reasonable under the circumstances. Actual results may differ from these estimates and reported results could differ under different assumptions or conditions. Our significant accounting policies and estimates are disclosed in Note 1 of the “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 1 of the “Notes to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2025. As of June 30, 2026, there have been no material changes to our significant accounting policies and estimates.

Results of Operations

Net Revenue

(dollar amounts in thousands)

The following tables details revenue by product category for the three and six months ended June 30, 2026 and 2025:

(amounts in thousands)

26

(amounts in thousands)

Product revenue decreased for the three and six months ended June 30, 2026 compared with the same period of 2025 primarily due to the decrease in sales of our EOL memory IC products and a decrease in shipments of our mmWave ICs and antenna modules. The decline in mmWave product shipments during the six months ended June 30, 2026 was attributed to subdued near-term demand from existing fixed wireless access customers.

(dollar amounts in thousands)

Services and other revenue includes royalty, non-recurring engineering services and license revenues. The increase in services and other revenue for the three and six months ended June 30, 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

(dollar amounts in thousands)

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

Cost of net revenue decreased for the three and six months ended June 30, 2026 when compared with the same periods of 2025, due to the corresponding decreases in product revenue.

(dollar amounts in thousands)

Gross profit decreased for the three months ended June 30, 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 June 30, 2026 and 2025, we sold mmWave inventory with cost of net revenue values of approximately $0.3 million and $0.2 million, respectively, which was written down prior to January 1, 2026. Gross profit decreased for the six months ended June 30, 2026 compared with the same period of 2025, primarily due to the reduction in product revenues combined with product mix, specifically the decrease in memory IC shipments. The decrease was partially offset by the net increase in services and other revenues. During the six months ended June 30, 2026 and 2025, we sold mmWave inventory with cost of net revenue values of approximately $0.5 million and $0.3 million, respectively.

Research and Development

(dollar amounts in thousands)

Our research and development, 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 remain flat for the remainder of 2026 compared with the first six months of 2026.

Selling, General and Administrative

(dollar amounts in thousands)

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.

The slight increase for the three months ended June 30, 2026 compared with the same period of 2025 was primarily attributable to increases in consulting and professional services costs. The decrease for the six months ended June 30, 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.

We expect 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

Cash Flows

As of June 30, 2026, we had cash and cash equivalents of $3.3 million and working capital of $4.0 million.

Net cash used in operating activities was $3.9 million for the first six months of 2026, which primarily resulted from our net loss of $4.7 million, partially offset by non-cash charges of $0.1 million of depreciation and amortization and $0.3 million of stock based compensation, and $0.4 million in net changes in assets and liabilities. 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 operating activities was $3.0 million for the first six months of 2025, which primarily resulted from our net loss of $2.3 million, as adjusted for $1.1 million in net changes in assets and liabilities, as partially offset by non-cash charges of $0.1 million of depreciation and amortization and $0.3 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 $0.3 million for the first six months of 2026, which was attributable to the purchase of fixed assets.

Net cash used in investing activities was approximately $45,000 for the first six months of 2025, which was attributable to the purchase of fixed assets.

Net cash provided by financing activities for the six months ended June 30, 2026 comprised $4.7 million of net proceeds from sales under our at-the market offering program, partially offset by approximately $0.1 million of payments related to costs associated with our committed equity facility and proceeds from option exercises.

Net cash provided by financing activities for the six months ended June 30, 2025 comprised $1.5 million of net proceeds from sales under our at-the market offering program, partially offset by repayment of financing lease liabilities.

Our future liquidity and capital requirements are expected to vary from quarter-to-quarter, depending on numerous factors, including:

• level of revenue;
• cost, timing and success of technology development efforts;
• 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;
• variations in manufacturing yields, material lead time and costs and other manufacturing risks;
• costs of acquiring other businesses and integrating the acquired operations; and
• profitability of our business.

Purchase Obligations

Our primary purchase obligations include non-cancelable purchase orders for inventory. At June 30, 2026, we had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $2.4 million.

Going Concern - Working Capital

We incurred net losses of approximately $4.7 million for the six months ended June 30, 2026 and $4.8 million for the year ended December 31, 2025, and we had an accumulated deficit of approximately $186.6 million as of June 30, 2026. These and prior year losses have resulted in significant negative cash flows and have required us to raise substantial amounts of additional capital. To date, we have primarily financed our operations through loans, offerings of common stock and warrants and issuances of convertible notes.

We expect to continue to incur 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 expenses. 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 June 30, 2026 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the fourth quarter of 2026. This estimate does not assume any further sales under the Sales Agreement or the Purchase Agreement with Roth Principal Investments, both of which remain available to us, at our discretion, as potential additional sources of capital, subject to compliance with the terms and conditions of each agreement, as applicable.

We will need to increase revenues beyond the 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. As a result of our expected operating losses and cash burn and recurring losses from operations, if we are unable to raise sufficient capital through additional debt or equity arrangements, there will be uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt as to our ability to continue as a going concern within one year from the date of issuance of our condensed consolidated financial statements. In addition, 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 may sell shares of our common stock under the Sales Agreement, and may sell shares of our common stock under the Purchase Agreement with Roth Principal Investments, in each case from time to time and at our discretion, and we are 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.

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:

• develop or enhance our products;
• continue to expand our product development and sales and marketing organizations;
• acquire complementary technologies, products or businesses;
• expand operations, in the United States or internationally;
• hire, train and retain employees; or
• respond to competitive pressures or unanticipated working capital requirements.

Our failure to do any of these things could seriously harm our ability to execute our business strategy and may force us to curtail our existing operations.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements or obligations that are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity or capital resources.

Indemnifications

In the ordinary course of business, we enter into contractual arrangements under which we may agree to indemnify the counter-party from losses relating to a breach of representations and warranties, a failure to perform certain covenants, or claims and losses arising from certain external events as outlined within the contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. We have also entered into indemnification agreements with our officers and directors. No material amounts related to these indemnifications are reflected in our condensed consolidated financial statements for the six months ended June 30, 2026.

Recent Accounting Pronouncements

See Note 1 to the condensed consolidated financial statements for a discussion of recently-issued accounting pronouncements.

Disclosure Controls and Procedures. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based on this evaluation, our management concluded that, as of June 30, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting. During the quarter ended June 30, 2026, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We face many significant risks in our business, some of which are unknown to us and not presently foreseen. These risks could have a material adverse impact on our business, financial condition and results of operations in the future. Other than as set forth below, there have been no material changes with respect to the risk factors disclosed under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, which we filed with the SEC on March 30, 2026.

We might not be able to continue as a going concern.

Our condensed consolidated financial statements as of June 30, 2026 have been prepared under the assumption that we will continue as a going concern for the next twelve months. As of June 30, 2026, we had cash and cash equivalents of $3.3 million and an accumulated deficit of $186.6 million. We believe that our existing cash and cash equivalents as of June 30, 2026 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the fourth quarter of 2026. This estimate does not assume any further sales under the Sales Agreement or the Purchase Agreement with Roth Principal Investments, both of which remain available to us, at our discretion, as potential additional sources of capital, subject to compliance with the terms and conditions of each agreement, as applicable.

Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to achieve sustainable revenues and profitable operations. 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. As a result of our expected operating losses and cash burn for the foreseeable future and recurring losses from operations, if we are unable to raise sufficient capital through additional debt or equity arrangements, there will be uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt as to our ability to continue as a going concern. In addition, 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. If we cannot continue as a viable entity, our stockholders would likely lose most or all of their investment in us.

If we are unable to generate sustainable operating profit and sufficient cash flows, then our future success will depend on our ability to raise capital. We cannot be certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to us or, if available, will be on terms acceptable to us. If we issue additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of our common stock, and our current stockholders may experience dilution. If we are unable to obtain funds when needed or on acceptable terms, we may be required to curtail our current product development programs, cut operating costs, forego future development and other opportunities or even terminate our operations.

Our forecast of the period of time through which our financial resources will be adequate to support our operating requirements is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this “Risk Factors” section and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. We have based this estimate on a number of assumptions that may prove to be wrong and changing circumstances beyond our control may cause us to consume capital more rapidly than we currently anticipate. Our inability to obtain additional funding when we need it could seriously harm our business.

We have a history of losses, and we will need to raise additional capital.

We incurred net losses of approximately $4.7 million for the six months ended June 30, 2026 and $4.8 million for the year ended December 31, 2025, and we had an accumulated deficit of approximately $186.6 million as of June 30, 2026. 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 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 issuance and sale of our common stock to Roth Principal Investments may cause dilution to our other stockholders and the sale of the shares of common stock acquired by Roth Principal Investments, or the perception that such sales may occur, could cause the price of our common stock to decrease.

On June 30, 2026, we entered into the Purchase Agreement with Roth Principal Investments, pursuant to which Roth Principal Investments has committed to purchase up to $25.0 million of shares of our common stock, upon the terms and subject to the conditions set forth in the Purchase Agreement. The shares of our common stock that may be issued under the Purchase Agreement may be sold by us to Roth Principal Investments at our discretion from time to time over a 36-month period following the effective date of the registration statement registering the resale of such shares, subject to certain conditions. The purchase price for the shares that we may sell to Roth Principal Investments under the Purchase Agreement will fluctuate based on the market price of our common stock. Depending on demand and market liquidity at the time, sales of such shares by Roth Principal Investments may cause the trading price of our common stock to decrease.

We have the right to control the timing and amount of any future sales of our shares to Roth Principal Investments, subject to certain limitations set forth in the Purchase Agreement. Any sales of our common stock to Roth Principal Investments will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Roth Principal Investments all, some or none of the shares of our common stock that may be available for us to sell pursuant to the Purchase Agreement. If and when we sell shares to Roth Principal Investments, Roth Principal Investments may then resell all, some or none of those shares at any time or from time to time in its discretion. Therefore, our sales to Roth Principal Investments could result in substantial dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stock to Roth Principal Investments, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

The Purchase Agreement includes the Exchange Cap on the number of shares issuable to Roth Principal Investments, representing 19.99% of our shares of common stock outstanding immediately prior to execution of the Purchase Agreement. The Exchange Cap will not apply if either (i) we obtain stockholder approval to issue shares in excess of the Exchange Cap or (ii) the average price per share paid by Roth Principal Investments for all shares purchased under the Purchase Agreement equals or exceeds $0.9853, in each case in accordance with Nasdaq Listing Rule 5635(d). We intend to seek stockholder approval to remove the Exchange Cap, which, if obtained, would permit us to issue a substantially greater number of shares to Roth Principal Investments than would otherwise be permitted at a lower price per share, resulting in materially greater dilution to our stockholders than described above.

Our evaluation of strategic alternatives may not lead to a favorable outcome and could create business disruption and stock price volatility.

In July 2025, our board of directors authorized the exploration of strategic alternatives, including a merger, sale of assets or other similar transaction, all intended to maximize stockholder value and further our business operations. We engaged an investment bank to assist with the exploration process.

The process of reviewing potential strategic alternatives has been and may continue to be a significant distraction for our board of directors and management, and has required and may continue to require the expenditure of significant time and resources by us, which may cause concern to our employees, investors, strategic partners, and other constituencies and may have a material impact on our business and operating results and/or result in increased volatility in our share price.

There can be no assurance that our strategic review process will result in any transaction or other strategic outcome. Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to third parties in a potential transaction with us on reasonable terms.

We do not intend to disclose further developments on this strategic review process unless and until we determine that such disclosure is appropriate or necessary. If we determine to engage in a transaction as a result of our exploration and evaluation of strategic alternatives, our future business, prospects, financial position and operating results could be significantly different than those in historical periods or projected by our management. Moreover, the review of strategic alternatives may disrupt our business by causing uncertainty among current and potential employees, suppliers, customers and investors, and could expose us to potential litigation. The selection and execution of a strategic alternative may lead to similar disruptions, and parties advocating for alternatives not selected may solicit support for such other alternatives, causing further disruption. Until the process is concluded, perceived uncertainties related to our future may result in the loss of potential business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and business partners. Further, any alternative strategic paths that may be pursued and completed ultimately may not deliver the anticipated benefits or enhance stockholder value.

The occurrence of any one or more of the above risks could have a material adverse impact on our business, financial condition, results of operations and cash flows.

If we are unable to satisfy the continued listing requirements of Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected.

Our common stock may lose value and could be delisted from Nasdaq due to several factors or a combination of such factors. While our common stock is currently listed on Nasdaq, we can give no assurance that we will be able to maintain compliance with the continued listing requirements of Nasdaq, including, but not limited to, the corporate governance requirements and the minimum closing bid price requirement or the minimum equity requirement. If we fail to maintain compliance with any such continued listing requirement, there can also be no assurance that we will be able to regain compliance with any such continued listing requirement in the future or that our common stock will not be delisted in the future.

On July 21, 2026, 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 July 20, 2026, 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). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided a period of 180 calendar days, or until January 19, 2027, in which to regain compliance. In order to regain compliance with the minimum bid price requirement, the closing bid price of our common stock must be at least $1 per share for a minimum of ten consecutive business days during this 180-day period. In the event we do not regain compliance within this 180-day period, we may be eligible to seek an additional compliance period of 180 calendar days provided we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and further provide written notice to Nasdaq of our intent to cure the deficiency during this second compliance period by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will provide notice to us that our common stock will be subject to delisting.

There can be no assurance that we will be able to regain compliance with the minimum bid price requirement and other continued listing requirements of Nasdaq, and our common stock could be delisted in the future.

Our common stock may lose value and could be delisted from Nasdaq due to several factors or a combination of such factors. While our common stock is currently listed on Nasdaq, we can give no assurance that we will be able to maintain compliance with the continued listing requirements of Nasdaq, including, but not limited to, the corporate governance requirements and the minimum closing bid price requirement or the minimum equity requirement. If we fail to maintain compliance with any such continued listing requirement, there can also be no assurance that we will be able to regain compliance with any such continued listing requirement in the future or that our common stock will not be delisted in the future.

If we were to be delisted, we would expect our common stock to be traded in the over-the-counter market which could adversely affect the liquidity of our common stock. Additionally, we could face significant material adverse consequences, including:

• a limited availability of market quotations for our common stock;
• a decreased ability to issue additional securities or obtain additional financing in the future;
• reduced liquidity for our stockholders;
• potential loss of confidence by customers, collaboration partners and employees; and
• loss of institutional investor interest.

In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.