Peraso Inc. (Form: 8-K, Received: 12/20/2021 14:18:30)

PERASO INC.

Date: December 20, 2021

/s/ James W. Sullivan

James W. Sullivan

Chief Financial Officer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): December 15, 2021

Peraso Inc.

(Exact Name of Registrant as Specified in Charter)


000-32929
(Commission File Number)

Delaware		77-0291941
(State or Other Jurisdiction of Incorporation)		(I.R.S. Employer Identification Number)

2309 Bering Dr.

San Jose, California 95131

(Address of principal executive offices, with zip code)

(408) 418-7500

(Registrant’s telephone number, including area code)

MoSys, Inc.

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PRSO	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

On September 14, 2021, Peraso Inc., formerly known as MoSys, Inc. (the “Company”), and its subsidiaries, 2864552 Ontario Inc. (“Callco”) and 2864555 Ontario Inc. (“Canco”), both corporations existing under the laws of the province of Ontario, entered into an Arrangement Agreement (the “Arrangement Agreement”) with Peraso Technologies Inc., a corporation existing under the laws of the province of Ontario (“Peraso” and together with the Company, Callco, and Canco – the “Parties”), to acquire all of the issued and outstanding common shares of Peraso (“Peraso Shares”), including those Peraso Shares to be issued in connection with the conversion or exchange of secured convertible debentures of Peraso and common share purchase warrants of Peraso, as applicable, by way of a statutory plan of arrangement (the “Arrangement”) under the Business Corporations Act (Ontario), on and subject to the terms and conditions of the Arrangement Agreement. On October 21, 2021, the Parties amended the Arrangement Agreement and entered into the First Amending Agreement as disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on October 22, 2021. On December 17, 2021, following the satisfaction of the closing conditions set forth in the Arrangement Agreement, the Arrangement was completed.

Item 1.01

Entry into a Material Definitive Agreement.

To the extent required by Item 1.01 of Form 8-K, the information contained in (or incorporated by reference into) Item 2.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.

On December 17, 2021, the Company and Peraso entered into an Intercompany Services Agreement (the “Intercompany Services Agreement”). Pursuant to the Intercompany Services Agreement, Peraso agreed to provide the Company with certain general management, business consulting, and administrative support services including but not limited to those provided pursuant to the terms and conditions of that certain Executive Employment Agreement, dated December 17, 2021, by and between Peraso and Ronald Glibbery (the “Glibbery Employment Agreement”). In accordance with the terms of the Intercompany Services Agreement, the aforementioned services will be provided in consideration of the service fee equal to the costs of performing the entirety of the services until the earlier of the date which is 15 days following the giving of written notice by either party to the other party or any other time, as determined by mutual agreement of the parties. The Intercompany Service Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada. Peraso entered into the Intercompany Services Agreement as a wholly-owned subsidiary of the Company.

The foregoing description of the Intercompany Service Agreement does not purport to be complete and is qualified in its entirety by reference to the Intercompany Service Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.2 and is incorporated by reference into this Item 1.01.

Item 2.01

Completion of Acquisition or Disposition of Assets.

On December 17, 2021, the Company completed the Arrangement pursuant to the terms of the Arrangement Agreement. Under the terms of the Arrangement Agreement, at the effective time of the Arrangement (the “Effective Time”), each Peraso Share that was issued and outstanding immediately prior to the Effective Time was converted into the right to receive approximately 0.0452391223872678 (the “Exchange Ratio”) newly issued shares of common stock of the Company, par value $0.001 per share (“Common Stock”), or shares of Canco, which are exchangeable for shares of Common Stock (“Exchangeable Shares”) at the election of each former Peraso stockholder.

In addition, pursuant to the terms of the Arrangement Agreement, (i) certain warrants to purchase Peraso Shares outstanding immediately prior to the Effective Time were exercised in consideration for the issuance of Peraso Shares equal, in each case, to the Peraso Warrant Consideration Amount (as defined in the Arrangement Agreement) pursuant to the terms of the Arrangement Agreement; (ii) each convertible debenture of Peraso outstanding immediately prior to the Effective Time and all principal and accrued but unpaid interest thereon was converted into Peraso Shares at a conversion price equal to the conversion price set out in each such debenture pursuant to the Arrangement Agreement; and (iii) each outstanding option to purchase Peraso Shares (each, a “Peraso Option”) was exchanged for a replacement option to purchase such number of shares of Common Stock that is equal to the product of (A) the number of Peraso Shares subject to the Peraso Option immediately before the Effective Time, and (B) the Exchange Ratio, and rounded down to the nearest whole number of shares of Common Stock.

At the Effective Time, an aggregate of 9,295,097 Exchangeable Shares and 3,558,151 shares of Common Stock were issued to the former Peraso stockholders. Of such shares, pursuant to the terms of the Agreement, the Company held in escrow an aggregate of 1,312,878 Exchangeable Shares and 502,567 shares of Common Stock (collectively, the “Earnout Shares”). The Earnout Shares are escrowed pursuant to the terms of an escrow agreement on a pro rata basis from the aggregate consideration received by the Peraso stockholders, subject to the offset by the Company for any losses in accordance with the Agreement. Such Earnout Shares shall be released, subject to any offset claim, upon the satisfaction of the earlier of: (a) any date following the first anniversary of the Effective Time and prior to the third anniversary of the Effective Time where the volume weighted average price of the Common Stock for any 20 trading days within a period of 30 consecutive trading days is at least $8.57 per share, subject to adjustment for stock splits or other similar transactions; (b) the date of any sale of all or substantially all of the assets or shares of the Company; or (c) the date of any bankruptcy, insolvency, restructuring, receivership, administration, wind-up, liquidation, dissolution, or similar event involving the Company. All and any voting rights and other stockholder rights, other than with respect to dividends and distributions, with respect to the Earnout Shares are suspended until the Earnout Shares are released from escrow.

In connection with the Arrangement, effective as of December 20, 2021, the Company changed its name from “MoSys, Inc.” to “Peraso Inc.” by filing the certificate of amendment to the Company’s certificate of incorporation (the “Certificate of Amendment”) on December 15, 2021. The shares of Common Stock, which previously traded on the Nasdaq Capital Market (“Nasdaq”) through the close of business on December 17, 2021 under the ticker symbol “MOSY” commenced trading on Nasdaq under the ticker symbol “PRSO” on December 20, 2021, as of which time the Common Stock was also represented by a new CUSIP number 71360T 101. The foregoing description of the material terms of the Certificate of Amendment does not purport to be complete and is qualified in its entirety by reference to the Certificate of Amendment, which is attached to this Current Report on Form 8-K as Exhibit 3.1 and is incorporated by reference into this Item 2.01.

In connection with the Arrangement, on December 15, 2021, the Company filed the Certificate of Designation of Series A Special Voting Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware to designate Series A Special Voting Preferred Stock (the “Special Voting Share”) in accordance with the terms of the Arrangement Agreement in order to enable the holders of Exchangeable Shares to have their voting rights exercised. After the Effective Time, each Exchangeable Share has become exchangeable for one share of Common Stock of the Company and while outstanding, the Special Voting Share enables holders of Exchangeable Shares to cast votes on matters for which holders of the Common Stock are entitled to vote, and by virtue of the share terms relating to the Exchangeable Shares, to receive dividends that are economically equivalent to any dividends declared with respect to the shares of Common Stock. The foregoing is only a brief description of the material terms of the Certificate of Designation and does not purport to be a complete description of the rights and obligations thereunder. Such description is qualified in its entirety by reference to the Certificate of Designation, which is attached to this Current Report on Form 8-K as Exhibit 3.2 and is incorporated by reference into this Item 2.01.

Immediately following the Effective Time, there were 19,753,713 shares of Common Stock outstanding, excluding the Earnout Shares being held in escrow, and 23,272,641 shares of Common Stock outstanding on a fully-diluted basis and including the Earnout Shares, with the former stockholders of Peraso owning 61% of the economic and voting interest of the Company and the Company’s stockholders immediately prior to the Effective Time holding the remaining 39% economic and voting interest. The Exchangeable Shares, which can be converted into Common Stock at the option of the holder and have the same voting rights as Common Stock, are similar in substance to shares of Common Stock and, therefore, have been included in the determination of outstanding Common Stock immediately following the Effective Time.

The issuance of (i) the shares of Common Stock to those Peraso stockholders that elected to receive or otherwise will receive shares of Common Stock in connection with the Arrangement and (ii) the Exchangeable Shares to those Peraso Stockholders that elected to receive Exchangeable Shares in connection with the Arrangement were issued in reliance upon the exemption from registration provided by Section 3(a)(10) of the Securities Act of 1933, as amended, pursuant to the approval of the terms and conditions of the issuance and exchange of such securities by the Ontario Superior Court of Justice (Commercial List) by the final order issued and entered on November 26, 2021. The subsequent issuance of shares of Common Stock to the former stockholders of Peraso who elected to receive Exchangeable Shares in exchange for such stockholders’ Exchangeable Shares will be registered with the SEC on a Registration Statement on Form S-3.

As of the Effective Date, the Company and each of the executive officers and directors of the Company, and any other stockholders of the Company owning 5.0% or more of Common Stock (calculated on a fully-diluted basis), in each case, at the Effective Time (collectively, “Locked-Up Persons”), entered into the lock-up agreements (the “Lock-Up Agreements”), pursuant to which, inter alia, each such Locked-Up Person agreed, without the prior written consent of the Company, not to offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of or lend (“Transfer”), directly or indirectly, any shares of Common Stock or any security convertible into or exercisable or exchangeable to the Common Stock, or publicly express the intent to do so until the 12-month anniversary of the date of the Effective Time (the “Lock-Up Period”). From and after the expiration of the Lock-Up Period, until ninety 90 days after the expiration of the Lock-Up Period (the “Leak-Out Period”) the Locked-Up Persons may not Transfer on any trading day during the Leak-Out Period (any such date, a “Date of Determination”), Common Stock or the aforementioned securities, held by them in an amount representing more than 20% of the average daily trading volume of Common Stock as reported by Bloomberg, L.P. for the five trading days prior to each applicable Date of Determination. During the Lock-Up Period and the Leak-Out Period, such Locked-Up Persons are precluded from engaging in any hedging or other similar transaction with respect to their securities. The Lock-Up Agreements contain customary exceptions for bona fide gift or gifts or charitable contributions, Transfers by testate succession or intestate succession, etc. Additionally, the restrictions of the Lock-Up Agreements do not apply to certain conversions or exercises of warrants, convertible notes, Exchangeable Shares that are outstanding as of the Effective Time and Common Stock issued as a result of such exercise, as well as the establishment of any contract, instruction or plan that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act (as defined herein).

The foregoing description of the Lock-Up Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Lock-Up Agreement, a copy of which is being filed as Exhibit 10.1 hereto and is incorporated by reference into this Item 2.01.

Item 3.02

Unregistered Sales of Equity Securities.

To the extent required by Item 3.02 of Form 8-K, the information contained in Item 2.01 of this Current Report on Form 8-K is incorporated by reference herein.

Item 5.01

Changes in Control of Registrant.

The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.

In accordance with the terms of the Arrangement Agreement, each of the directors of the Company who would not be continuing as a director after the completion of the Arrangement resigned from the Board of Directors of the Company (the “Board”) and any respective committees of the Board to which they belonged as of the closing of the Arrangement. In connection with the Arrangement, the size of the Board post-Arrangement was set at a total of five directors, and the Board was reconstituted as follows: Daniel Lewis and Robert Newell, who did not resign, one of the initial post-Closing directors, Ronald Glibbery, became the Company’s Chief Executive Officer, and two initial post-Closing directors, Ian McWalter and Andreas Melder, who the Board determined are independent in accordance with Nasdaq requirements, were selected by Peraso. Each post-Closing director was appointed to the Board to serve until the next annual meeting of stockholders at which the members of the Board stand for election (subject to the Company’s amended and restated bylaws) or until such director’s earlier death, resignation, or removal or until such director’s successor is duly elected and qualified.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

To the extent required by Item 5.02 of Form 8-K, the information contained in Item 2.01 of this Current Report on Form 8-K is incorporated by reference herein.

(b) Resignation of Directors

Pursuant to the Arrangement Agreement, as of the Effective Time, Scott Lewis and Daniel J. O’Neil, resigned from the Board and any respective committees of the Board to which they belonged. Additionally, Robert Newell resigned as the chairperson of the Compensation Committee of the Board.

As of the Effective Time, the Board appointed Ronald Glibbery, as Chief Executive Officer of the Company, and Brad Lynch, as Chief Operating Officer of the Company. There are no familial relationships among any of the Company’s directors or executive officers.

Ronald Glibbery

Mr. Glibbery (age 60) founded Peraso in 2008 and was its Chief Executive Officer until the Effective Time. Mr. Glibbery has over 25 years of experience in the semiconductor industry. Prior to Peraso, Mr. Glibbery was the President of Intellon Corporation, the pioneer and leader in the development of semiconductor devices used for powerline communications. Additionally, Mr. Glibbery was on the executive team of LSI Logic of Canada, a publicly traded company on the Toronto Stock Exchange. The Board believes Mr. Glibbery is qualified to serve as a director because of his extensive general management and technical expertise, as well as his experience as a chief executive officer and public company director.

Mr. Glibbery serves the Company pursuant to the Glibbery Employment Agreement by and between Peraso and Mr. Glibbery and the Intercompany Service Agreement. The Glibbery Employment Agreement provides for a $400,000 base salary that may be adjusted from time to time at the discretion of the Board, entitles Mr. Glibbery to a bonus with a target of 75% of his base salary and a maximum amount of 125% of his base salary, makes Mr. Glibbery eligible to receive a one-time equity incentive award under the Company’s Amended and Restated 2019 Stock Incentive Plan (the “Plan”), subject to the Board’s discretion, entitles Mr. Glibbery to participate in the health and welfare benefits plans of the Company and to receive expense reimbursement. The Glibbery Employment Agreement contains customary confidentiality, non-competition, and intellectual property assignment provisions. The Glibbery Employment Agreement is not entered for a defined term and may be terminated automatically upon Mr. Glibbery’s death, by the Company (for cause or without cause), and by Mr. Glibbery. The table below summarizes the payments Mr. Glibbery would be entitled to depending on the respective type of termination of Glibbery Employment Agreement.


Termination Type	Payments and Benefits

Termination for Cause or Voluntary Resignation	(i)	accrued and unpaid base salary and any other payments required by law, including those in connection with accrued vacation; and
Termination for Cause or Voluntary Resignation	(ii)	reimbursement for business expenses.

Termination Without Cause, for Good Reason, upon Change of Control, Death or Disability	(i)	accrued and unpaid base salary and any other payments required by law including those in connection with accrued vacation;
	(ii)	reimbursement for business expenses;
	(iii)	the payment of the greater of (A) the sum of: (x) pay in lieu of notice of termination, in the amount required pursuant to the ESA (as defined in the Glibbery Employment Agreement), and (y) statutory severance pay (if applicable) in the amount required to be provided pursuant to the ESA; or (B) twenty-four (24) months of base salary in lieu of notice, calculated solely by reference to the base salary except and only to the extent as otherwise minimally required by the ESA, to be paid in the form of a lump sum;
	(iv)	any bonus awarded but not yet paid in respect of the fiscal year preceding the termination date;
	(v)	bonus for the year in which the employment terminates, prorated pursuant to the Glibbery Employment Agreement;


		(vi)		all benefits (as existed on the date notice of termination is provided) for the duration of the Severance Period (as defined in the Glibbery Employment Agreement);
		(vii)		any unvested equity and equity-related compensation that has been issued pursuant to the Plan will be immediately be accelerated and vested as of the termination date;
		(viii)		any vested equity and equity-related compensation that has been issued under the Plan will remain exercisable until 24 months following such termination; and
		(ix)		any other benefits and/or perquisites shall continue until the end of the ESA Notice Period (as defined in the Glibbery Employment Agreement).

The foregoing description of the Glibbery Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the Glibbery Employment Agreement, a copy of which is being filed as Exhibit 10.3 hereto and is incorporated herein by reference into this Item 5.02.

Brad Lynch

Mr. Lynch (age 49) has 25 years of communications product development experience, including 10 years of specific semiconductor IC development. Prior to founding Peraso in 2008, Mr. Lynch was a founder of Cogency Semiconductor, a fabless semiconductor company focused on the development of modems for powerline networking. At Cogency, Mr. Lynch was primarily responsible for driving the system architecture, including product management duties for both the digital and analog products. Upon the Intellon acquisition of Cogency, Mr. Lynch became the Director of Software Engineering at Intellon. In this role, he made significant technical contributions to the HomePlug Powerline specification, and was recognized by the organization as a HomePlug Fellow. The Company and Mr. Lynch have not completed their negotiations in connection with Mr. Lynch’s employment agreement as of the date of this Current Report on Form 8-K.

(d) Election of New Directors

As of the Effective Time, the Board appointed Ronald Glibbery, Ian McWalter, and Andreas Melder as directors of the Company. Each of the appointed directors entered into the Company’s standard form of indemnification agreement with the Company on December 17, 2021, the form of which is filed hereto as Exhibit 10.4.

Audit Committee

Effective as of the Effective Time, Ian McWalter and Andreas Melder were appointed as members of the Audit Committee of the Board.

Compensation Committee

Effective as of the Effective Time, Ian McWalter and Andreas Melder were appointed as members of the Compensation Committee of the Board. Mr. McWalter was appointed as the chairperson of the Compensation Committee.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

To the extent required by Item 5.03 of Form 8-K, the information contained in Item 2.01 of this Current Report on Form 8-K is incorporated by reference herein.

Item 7.01

Regulation FD Disclosure.

On December 20, 2021, the Company issued a press release announcing the completion of the Arrangement. A copy of the press release is furnished herewith as Exhibit 99.1.

The information presented in Item 7.01 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or specifically incorporates it by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01

Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

The financial statements required by Item 9.01(a) and the notes related thereto are filed as Exhibit 99.2 and 99.3 to this report.

(b) Pro Forma Financial Information

The pro forma financial information required by Item 9.01(b) and the notes related thereto are filed as Exhibit 99.4 to this report.

(d) Exhibits.


Exhibit No.		Description

3.1		Certificate of Amendment to Articles of Incorporation (Name Change)

3.2		Certificate of Designation of Series A Special Voting Preferred Stock

10.1		Form of Lock-Up Agreement

10.2		Intercompany Services Agreement

10.3*		Employment Agreement (Ronald Glibbery)

10.4(1)		Form of Indemnification Agreement used from June 2012 to present

23.1		Consent of Independent Registered Public Accounting Firm — Weinberg & Co., P.A

99.1		Press Release dated December 20, 2021

99.2		Financial Statements of Peraso Technologies Inc. as of December 31, 2020 and December 31, 2019

99.3		Unaudited Condensed Interim Financial Statements of Peraso Technologies Inc. as of September 30, 2021 and September 30, 2020

99.4		Unaudited Proforma Financial Statements

104		The cover page of this Current Report on Form 8-K, formatted in Inline XBRL

*	Agreement with management or compensatory plan or arrangement.

(1)	Incorporated by reference to Exhibit 10.22 to Form 10-Q filed by the Company on August 9, 2012 (Commission File No. 000-32929).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 3.1

CERTIFICATE OF AMENDMENT OF

RESTATED CERTIFICATE OF INCORPORATION

OF MOSYS, INC.

MoSys, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify:

1. That the name of the Corporation is MoSys, Inc., and that the Corporation was incorporated on August 1, 2000 pursuant to the General Corporation Law of the State of Delaware (the “DGCL”).

2. That this Certificate of Amendment of Restated Certificate of Incorporation (this “Certificate of Amendment”) amends the provisions of the Corporation’s Restated Certificate of Incorporation filed with the Delaware Secretary of State on November 12, 2010, as amended by that certain Certificate of Amendment of Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on February 14, 2017, and by that certain Certificate of Amendment of Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on August 27, 2019 (collectively, the “Certificate of Incorporation”).

3. That in accordance with Section 242 of the DGCL, the Board of Directors of the Corporation has duly adopted resolutions proposing to amend the Certificate of Incorporation, declaring said amendment to be advisable and in the best interests of the Corporation and its stockholders.

4. That Article I of the Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:

ARTICLE I

“The name of the corporation is Peraso Inc. (the “Corporation”).”

5. That all other provisions of the Certificate of Incorporation remain in full force and effect.

6. That this Certificate of Amendment shall be effective at 12:01 a.m. Eastern Time on December 20, 2021.

[Signature Page Follows]

IN WITNESS WHEREOF, this Certificate of Amendment has been executed by a duly authorized officer of the Corporation as of December 15, 2021.


By:		/s/ James Sullivan
Name:		James Sullivan
Title:		Chief Financial Officer

Exhibit 3.2

MOSYS, INC.

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

SERIES A SPECIAL VOTING PREFERRED STOCK

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

Pursuant to Section 151 of the Delaware General Corporation Law, the undersigned does hereby certify, on behalf of MoSys, Inc., a Delaware corporation (“Company”), that the following resolution was duly adopted by the board of directors of the Company (the “Board”) pursuant to Article IV of the Restated Certificate of Incorporation of the Company, as amended.

WHEREAS, the Restated Certificate of Incorporation of the Company, as amended (the “Certificate of Incorporation”), authorizes the issuance of up to 20,000,000 shares of preferred stock, $0.01 par value per share, of the Company (“Preferred Stock”) in one or more series, which Preferred Stock shall have such distinctive designation or title, voting powers or no voting powers, and such preferences, rights, qualifications, limitations or restrictions, as shall be stated in such resolution or resolutions providing for the issuance of such class or series of Preferred Stock as may be adopted from time to time by the Board prior to the issuance of any shares thereof;

AND WHEREAS, it is the desire of the Board to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights, preferences, powers, restrictions and limitations of the shares of such new series.

NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby provide for the issue of a series of Preferred Stock and does hereby in this Certificate of Designation (this “Certificate of Designation”) establish and fix and herein state and express the designation, rights, preferences, powers, restrictions, and limitations of such series of Preferred Stock as follows:

TERMS OF SPECIAL VOTING PREFERRED STOCK

Section 1. Designation, Amount and Par Value. The series of Preferred Stock shall be designated as Series A Special Voting Preferred Stock (the “Special Voting Preferred Stock”) and the number of shares so designated shall be one (1). The sole outstanding share of Special Voting Preferred Stock shall have a par value of $0.01 per share.

Section 2. Dividends. The holder of record of the share of Special Voting Preferred Stock shall not be entitled to receive any dividends declared and paid by the Company.

Section 3. Voting Rights.

(a) The holder of record of the share of Special Voting Preferred Stock, except as otherwise required under applicable law or as set forth in subparagraph (b) below, shall not be entitled to vote on any matter required or permitted to be voted upon by the stockholders of the Company.

(b) With respect to all meetings of the stockholders of the Company at which the holders of the Company’s common stock, $0.01 par value per share, are entitled to vote (each, a “Stockholder Meeting”) and with respect to any written consents sought by the Company from the holders of such common stock (each, a “Stockholder Consent”), the holder of the share of Special Voting Preferred Stock shall vote together with the holders of such common stock as a single class except as otherwise required under applicable law, and the holder of the share of Special Voting Preferred Stock shall be entitled to cast on such matter a number of votes equal to one vote plus the number of Exchangeable Shares (the “Exchangeable Shares”) of 2864555 Ontario Inc., a corporation existing under the laws of the Province of Ontario (“Canco”), outstanding as of the record date for determining stockholders entitled to vote at such Stockholder Meeting or in connection with the applicable Stockholder Consent (i) that are not owned by the Company or its affiliates and (ii) as to which the holder of the share of Special Voting Preferred Stock has received voting instructions from the holders of such Exchangeable Shares in accordance with the Voting and Exchange Agency Agreement (the “Agency Agreement”) to be entered into among the Company, Canco and the agent thereunder (the “Agent”).

Section 4. Liquidation. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holder of record of the Special Voting Preferred Stock shall not be entitled to receive any assets of the Company available for distribution to its stockholders.

Section 5. Other Provisions.

(a) The holder of record of the share of Special Voting Preferred Stock shall not have any rights hereunder to convert such share into, or exchange such share for, shares of any other series or class of capital stock of the Company.

(b) The Agent shall exercise the voting rights attached to the share of Special Voting Preferred Stock pursuant to and in accordance with the Agency Agreement. The voting rights attached to the share of Special Voting Preferred Stock shall terminate pursuant to and in accordance with the Agency Agreement.

(c) At such time as the share of Special Voting Preferred Stock has no votes attached to it, the Special Voting Preferred Stock shall be automatically cancelled and shall not be reissued as a share of Special Voting Preferred Stock. Any share of Special Voting Preferred Stock so cancelled shall, upon its cancellation, and upon the taking of any action required by law, become an authorized but unissued share of Preferred Stock undesignated as to series and may be reissued a part of a new series of Preferred Stock, subject to the conditions and restrictions set forth in the Certificate of Incorporation or imposed by the Delaware General Corporation Law

(d) This Certificate of Designation shall be effective upon filing.

Section 6. No Other Rights or Privileges. Except as specifically set forth herein, the holder of the share of Special Voting Preferred Stock shall have no other rights, privileges or preferences with respect to the Special Voting Preferred Stock.

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Company be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of the Delaware General Corporation Law.

[Signature page follows.]

IN WITNESS WHEREOF, the undersigned has executed this Certificate this 15th day of

December, 2021.


MOSYS, INC.

Per:		/s/ James Sullivan
		Name: James Sullivan
		Title: Chief Financial Officer

[Signature Page to Certificate of Designation]

Exhibit 10.1

MoSys, Inc.

Lock-Up Agreement

__________________, 2021

This Lock-Up Agreement (this “Agreement”) is executed by and between MOSYS, INC., a corporation existing under the laws of the State of Delaware (“RTO Acquiror”), and the undersigned signatory in connection with that certain Arrangement Agreement (the “Arrangement Agreement”), dated September 14, 2021, entered into among RTO Acquiror, 2864555 ONTARIO INC., a corporation existing under the laws of the Province of Ontario (“Canco”), 2864552 ONTARIO INC., a corporation existing under the laws of the Province of Ontario (“Callco”), and PERASO TECHNOLOGIES INC., a corporation existing under the laws of the Province of Ontario (“Peraso”), pursuant to which, among other things, RTO Acquiror will, indirectly through Canco, acquire all of the issued and outstanding common shares in the capital of Peraso in exchange for the Consideration, by way of a statutory plan of arrangement, which is to be completed under the provisions of the Business Corporations Act (Ontario) on and subject to the terms and conditions contained in the Arrangement Agreement. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Arrangement Agreement.

As an inducement to the parties entering into the Arrangement Agreement and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned, by executing this Agreement, agrees that, without the prior written consent of RTO Acquiror, during the period commencing at the Effective Time and continuing until the time set forth in the following paragraph, the undersigned will not: (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of or lend, directly or indirectly, any shares of common stock of RTO Acquiror (“RTO Acquiror Common Stock”) or any securities convertible into, exercisable or exchangeable for or that represent the right to receive shares of RTO Acquiror Common Stock (including without limitation, RTO Acquiror Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant) whether now owned or hereafter acquired (the “Securities”); (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of RTO Acquiror Common Stock or such other securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to, the registration of any RTO Acquiror Common Stock or any security convertible into or exercisable or exchangeable RTO Acquiror Common Stock); or (4) publicly disclose the intention to do any of the foregoing (each of the foregoing restrictions, the “Lock-Up Restrictions”).

Notwithstanding the terms of the foregoing paragraph, the Lock-Up Restrictions shall automatically terminate and cease to be effective with respect to the Securities on the twelve (12) month anniversary of the date of the Effective Time. The period during which the Lock-Up Restrictions apply to any particular portion of the Securities shall be deemed the “Lock-Up Period” with respect thereto. From and after the expiration of the Lock-Up Period, until ninety (90) days after the expiration of the Lock-Up Period (the “Leak-Out Period,” and together with the Lock-Up Period, the “Restricted Period”), the undersigned may not sell, dispose or otherwise transfer, directly or indirectly, (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) on any Trading Day during the Leak-Out Period (any such date, a “Date of Determination”), Securities, held by the undersigned in an amount representing more than 20% of the average daily volume of RTO Acquiror Common Stock as reported by Bloomberg, L.P. for the five trading days prior to each applicable Date of Determination (the “Leak-Out Restrictions” and together with the Lock-Up Restrictions, the “Restrictions”). Following expiration of the Restricted Period, all Securities shall not be subject to the Restrictions.

The undersigned agrees that the Restrictions preclude the undersigned from engaging in any hedging or other transaction during the Restricted Period with respect to any then-subject Securities which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of such Securities even if such Securities would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) during the Restricted Period with respect to such Securities or with respect to any security that includes, relates to, or derives any significant part of its value from such Securities.

Notwithstanding the foregoing, during the Restricted Period, the undersigned may transfer any of the Securities:

(i)

as a bona fide gift or gifts or charitable contribution(s),

(ii)

to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned,

(iii)

if the undersigned is a corporation, partnership, limited liability company, trust or other business entity (1) to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) or subsidiary of the undersigned or that controls, is controlled by, or under common control with the undersigned, (2) as distributions of Securities to partners, subsidiaries, affiliates, limited liability company members or stockholders of the undersigned, holders of similar equity interests in the undersigned and any investment fund or affiliated entity or (3) as a transfer or distribution to any employee of the undersigned or an entity listed in clause (1) above or the undersigned,

(iv)

if the undersigned is a trust, to the beneficiary of such trust,

(v)

by testate succession or intestate succession,

(vi)

to any immediate family member, any investment fund, family partnership, family limited liability company or other entity controlled or managed by the undersigned,

(vii)

to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (vi),

(viii)

to RTO Acquiror in a transaction exempt from Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) upon a vesting event of the Securities or upon the exercise of options or warrants to purchase RTO Acquiror Common Stock on a “cashless” or “net exercise” basis or to cover tax withholding obligations of the undersigned in connection with such vesting or exercise (but for the avoidance of doubt, excluding all manners of exercise that would involve a sale in the open market of any securities relating to such options or warrants, whether to cover the applicable aggregate exercise price, withholding tax obligations or otherwise); provided that any filing under Section 16(a) of the Exchange Act in connection with such transfer shall indicate, to the extent permitted by such Section and the related rules and regulations, the reason for such disposition and that such transfer of Securities was solely to RTO Acquiror, and provided, further that any Securities issued upon such exercise shall be subject to the restrictions set forth in this Agreement,

(ix)

(A) if the undersigned is an employee of the RTO Acquiror or its affiliates (including Peraso), the date on which the undersigned ceases to be so actively employed (without taking into account any notice period); or (B) if the undersigned is a director of the RTO Acquiror, the date on which the undersigned ceases to be a director of the RTO Acquiror,

(x)

acquired by the undersigned in open market transactions after the Effective Time, provided that no filing under Section 16(a) of the Exchange Act shall be required or shall be made voluntarily in connection with subsequent sales of Securities acquired in such open market transactions,

(xi)

pursuant to transfers in response to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to or with all holders of RTO Acquiror’s capital stock involving a “change of control” (as defined below) of RTO Acquiror that has been approved by the board of directors of RTO Acquiror, provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, the Securities shall remain subject to the restrictions contained in this Agreement. For purposes of this clause (xi), “change of control” means the consummation of any bona fide third-party tender offer, merger, consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, other than RTO Acquiror, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of the total voting power of the voting stock of RTO Acquiror (or surviving entity), or all or substantially all of the assets of RTO Acquiror,

(xii)

pursuant to a domestic relations order or order of a court or regulatory agency, or

(xiii)

pursuant to a pledge of shares as collateral for margin loans, and any transfer upon foreclosure upon such pledged shares;

provided, in the case of clauses (i)-(vii), that (A) such transfer shall not involve a disposition for value and (B) the transferee agrees in writing with RTO Acquiror to be bound by the terms of this Agreement; and provided, further, in the case of clauses (xii) and (xiii) the transferee agrees in writing with RTO Acquiror to be bound by the terms of this Agreement, and in the case of clauses (i), (ii) and (iv)-(vii) and (ix), no filing by any party (donor, donee, transferor or transferee) under Section 16(a) of the Exchange Act shall be required or shall be made voluntarily in connection with such transfer reporting a reduction in beneficial ownership of Securities during the Restricted Period. For purposes of this Agreement, “immediate family” shall mean any relationship by blood, marriage, domestic partnership or adoption, not more remote than first cousin, and shall include any former spouse.

In addition, the Restrictions shall not apply to (i) conversion or exercise of (x) warrants, (y) convertible notes, or (z) Exchangeable Shares into RTO Acquiror Common Stock or into any other security convertible into or exercisable for RTO Acquiror Common Stock that are outstanding as of the Effective Time (but for the avoidance of doubt, excluding all manners of conversion or exercise that would involve a sale in the open market of any securities relating to such warrants, whether to cover the applicable aggregate exercise price, withholding tax obligations or otherwise); provided that it shall apply to any of the Securities issued upon such conversion or exercise, or (ii) the establishment of any contract, instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act; provided that (a) no sales of the Securities shall be made pursuant to such a Plan prior to the expiration of

the Lock-Up Period and (b) to the extent a public announcement or filing under the Exchange Act is required of the undersigned or required or voluntarily made by or on behalf of RTO Acquiror regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of RTO Acquiror Common Stock may be made under such plan during the Restricted Period. The undersigned may not voluntarily make any such announcement or filing with respect to any such plan. In furtherance of the restrictions set forth in this Agreement, RTO Acquiror and its transfer agent and registrar are hereby authorized to decline to make any transfer of shares of RTO Acquiror Common Stock if such transfer would constitute a violation or breach of this Agreement.

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that upon request, the undersigned will execute any additional documents reasonably necessary to ensure the validity or enforcement of this Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

This Agreement shall take effect at the Effective Time under the Arrangement Agreement and shall not be operative until such time.

The undersigned understands that the parties to the Arrangement Agreement are entering into such agreement in reliance upon this Agreement.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware.

[Signature pages follow.]

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that, upon request, the undersigned will execute any additional documents necessary in connection with the enforcement hereof. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.


Very truly yours,

MOSYS, INC.
By:
		Signature
Name:
Title:

Dated: _______________


Very truly yours,

Printed Name of Holder

By:
		Signature

		Printed Name of Person Signing
		(and indicate capacity of person signing if
		signing as custodian, trustee, or on behalf of
		an entity)

Dated: _______________

Exhibit 10.2

INTERCOMPANY SERVICES AGREEMENT

THIS AGREEMENT is effective as of December 17, 2021 (the “Effective Date”).


BY AND BETWEEN:		MOSYS, INC.

		(hereinafter called the “Recipient”)

AND:		PERASO TECHNOLOGIES INC.

		(hereinafter called the “Service Provider”)

WHEREAS the Service Provider is a wholly-owned subsidiary of the Recipient;

AND WHEREAS the Service Provider wishes to provide the Services (as defined below) to the Recipient and the Recipient wishes to receive such Services from the Service Provider in accordance with the terms and conditions set forth below;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, it is agreed by and between the Parties as follows:

ARTICLE I – DEFINITIONS

1.1	Definitions. For the purposes of this Agreement or any notice, consent, request or other communication required to be given hereunder, the following words and phrases have the following meanings, unless the context otherwise requires:

(a)

“Agreement” means this Intercompany Services Agreement and all its appendices and instruments supplemental hereto or in amendment or confirmation hereof.

(b)

“Costs” in respect of the Services, means the full costs of performing such Services, including all or an appropriate portion of the direct and indirect costs incurred by the Service Provider in providing such Services, including, but not limited to, salaries, wages and benefits to employees, officers and directors, consultants’ fees, office space, facilities, travel, telecommunications, data processing, maintenance of books and records, materials and supplies, utilities, supervisory and clerical support and all other overhead, general and administrative costs associated with the personnel of the Service Provider engaged in the provision of the Services to the Recipient. To the extent the direct costs cannot be separately measured from similar costs incurred by the Service Provider, the Service Provider shall charge the Recipient on a prorated basis as may be agreed to by the Recipient.

(c)

“Effective Date” has the meaning ascribed thereto in the recitals.

(d)

“Parties” means, collectively, the Service Provider and the Recipient, and “Party” means any one of them.

(e)

“Recipient” has the meaning ascribed thereto in the recitals.

(f)

“Service Provider” has the meaning ascribed thereto in the recitals.

(g)

“Services” means those services relating to the Recipient’s Chief Executive Officer, including those to be provided pursuant to the terms and conditions of that certain Executed Employment Agreement, dated as of December 17, 2021, by and between the Service Provider and Ronald Glibbery (the “Employment Agreement”), as well as other general management, business consulting and administrative support provided by the Service Provider for the benefit of the Recipient.

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(h)

“Service Fee” means an amount equal to the Costs in respect of the Services.

(i)

“Term” has the meaning ascribed thereto in Section 2.1.

ARTICLE II – TERM AND TERMINATION

2.1	Term. The term for the provision of the Services by the Service Provider to the Recipient (the “Term”) commences on the Effective Date and will continue until the earlier of the following dates:

(a)

the date which is fifteen (15) days following the giving of written notice by either Party to the other Party; or

(b)

any time by mutual agreement of the Parties.

2.2

Effect of Termination. Upon the termination of the Term in accordance with Section 2.1, the Service Provider will only be entitled to receive payment for the Service Fees accrued up to the date of such termination. The Service Provider will, upon termination for any reason of its appointment hereunder, deliver to the Recipient all books of account, registers, correspondence and records of every description relating to the affairs of the Recipient which are in its possession, but the Service Provider will have the right to retain copies thereof.

ARTICLE III – PERFORMANCE OF SERVICES

3.1

Engagement of the Service Provider. The Recipient hereby engages the Service Provider to provide the Services, and the Service Provider hereby accepts such engagement, under the terms and conditions stated in this Agreement. The Recipient acknowledges that the Service Provider will provide the Services at and from the premises of the Service Provider, except as set forth in the Employment Agreement.

3.2	Duties of the Service Provider. The Service Provider will exercise the powers and discharge its duties conferred hereunder honestly and in good faith.

3.3

Delegation and Reliance on Agents. The Service Provider will appoint Ronald Glibbery to perform the Services in accordance with the Employment Agreement. The Service Provider may, with the consent of the Recipient, appoint from time to time appoint other personnel to perform or assist in performing any or all of the Services, duties and obligations required to be performed hereunder by the Service Provider. The Service Provider may act or rely in good faith upon the opinion or advice obtained from any accountant, lawyer or other expert in respect of any matter relating to their respective provision of the Services hereunder, and the Service Provider will not be responsible for any loss or damage incurred by the Recipient in respect thereof.

ARTICLE IV – TRADEMARK

4.1	Use of Trademark. The Service Provider may use the Recipient’s trademarks, on a royalty-free basis, in connection with, and as required to, perform the Services.

ARTICLE V – PAYMENT OF SERVICE FEES

5.1

Service Fees. In consideration for the Services received by it hereunder, the Recipient will pay to the Service Provider the Service Fees, as applicable, in accordance with Section 5.3; provided, however, that in no event shall such Service Fees exceed the amounts payable pursuant to the Employment Agreement except as otherwise agreed to by the Recipient in writing.

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5.2

Additional Costs. In addition to the Services, certain additional services may be made available to the Recipient by the Service Provider on an as-requested basis. In such event, the Service Provider shall notify the Recipient of the cost thereof and obtain the Recipient’s consent prior to performing such additional services.

5.3	Payment Terms. The Service Fees will be payable in arrears on a monthly basis. The Service Fees will be due when invoiced and shall be paid no later than 30 days from the date of invoicing.

5.4

Taxes. Taxes, duties or other charges imposed by any governmental authority in respect of the provision of the Services hereunder will be for the account of the Recipient, and the Service Provider may either invoice same separately or add them to the related invoice for the Services. The Parties agree to make such elections, obtain such registrations and permits, and obtain, present and/or file such exemption certificates as are necessary or beneficial under any applicable federal, provincial, state and other tax laws. The Parties also agree to retain all necessary documentation and to issue or obtain any applicable certificates to substantiate applicable exemptions under any applicable tax laws.

ARTICLE VI – MISCELLANEOUS

6.1

Independent Contractors. Each Party is and will remain an independent contractor and does not have any power, nor can it represent itself as having any power, to in any way bind or obligate any other Party or to assume or create any express or implied obligation or responsibility on behalf of any other Party. This Agreement is not to be construed as constituting an agency, partnership, joint venture or similar relationship between the Parties or creating any formal legal association that would impose liability on a Party for the act or omission of another Party.

6.2	Notices. Notices, directions and other communications under this Agreement must be given in writing and delivered at the addresses set forth below (or to the other address as the addressee has previously specified by notice):

to Recipient at:

2309 Bering Drive

San Jose, California, 95131

Attention: Chief Financial Officer

E-mail: jsullivan@mosys.com

to Service Provider at:

144 Front Street West, Suite 685

Toronto, ON, Canada, M5J 2L7

Attention: Ronald Glibbery

E-mail: ronald@perasotech.com

6.3

Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties with respect thereto. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement. The Parties have not relied and are not relying on any other information, discussion or understanding in entering into and completing the transactions contemplated by this Agreement.

6.4	Time of the Essence. Time is of the essence in this Agreement.

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6.5

Third Party Beneficiaries. The Parties intend that this Agreement will not benefit or create any right or cause of action in favour of, any person, other than the Parties. No person, other than the Parties to this Agreement, is entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum.

6.6

Waiver. No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the Party to be bound by the waiver. A Party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right it may have.

6.7

Successors and Assigns. This Agreement is binding on and enures to the benefit of the Parties and their respective successors, legal representatives and permitted assigns. This Agreement may not be assigned or transferred by any Party without the prior written consent of the other Party, not to be unreasonably withheld.

6.8

Severability. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, by an arbitrator or any court of competent jurisdiction from which no appeal exists or is taken, that provision will be severed from this Agreement and the remaining provisions will remain in full force and effect.

6.9	Governing Law. This Agreement is governed by and shall be interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

6.10	Further Assurances. Each Party agrees to execute such further instruments and documents and take such further action as the other Parties may reasonably request in order to give effect to the terms and purposes of this Agreement.

6.11	Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or PDF signatures), each of which when so executed shall be deemed an original, and such counterparts together shall constitute one and the same instrument.

[Signature page follows.]

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IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement effective as of the Effective Date.


		MOSYS, INC.

By:		/s/ Daniel Lewis
		Name: Daniel Lewis
		Title: President

		PERASO TECHNOLOGIES INC.

By:		/s/ Ron Glibbery
		Name: Ron Glibbery
		Title: CEO

Exhibit 10.3

EXECUTIVE EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is effective as of the 17^th day of December, 2021 (the “Effective Date”), between Peraso Technologies Inc. (the “Company”) and Ron Glibbery (the “Executive”).

RECITALS:

WHEREAS the Company desires to employ the Executive and the Executive desires to be employed by the Company, in accordance with the terms and conditions contained in this Agreement;

AND WHEREAS in connection with the closing of the transactions contemplated by the Arrangement Agreement, dated as of September 14, 2021 (as amended, the “Arrangement Agreement”), by and among the Company, MoSys, Inc. (“MoSys”), and its newly formed subsidiaries, 2864552 Ontario Inc. (“Callco”) and 2864555 Ontario Inc. (“Canco”), the Company and MoSys desire to employ the Executive as the Chief Executive Officer of the Company and MoSys, and the Executive desires to be employed in such capacities on the terms and conditions set forth herein;

AND WHEREAS the Company is only willing to enter into this Agreement on the basis that the Executive observe the restrictive covenants set out herein, which have been negotiated in good faith and which the Executive acknowledges as being reasonable given the nature of his position pursuant to this Agreement;

NOW THEREFORE In consideration of the foregoing, the Executive’s eligibility for the Bonus (as defined below) and the Option Grant (as defined below), and the other mutual agreements contained herein (the receipt and adequacy of which are acknowledged), the parties agree as follows:

ARTICLE 1

INTERPRETATION

Section 1.1

Definitions.

In this Agreement, unless otherwise defined herein, capitalized terms have the meaning set out in Schedule “A” annexed to this Agreement.

Section 1.2

Extended Meanings.

In this Agreement, words importing the singular include the plural and vice versa and words importing gender include all genders.

Section 1.3

Headings.

The division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and will not affect the construction or interpretation of this Agreement.

Section 1.4

References.

References to a specific article, or section are to be construed as references to that specified article, or section of this Agreement, unless the context otherwise requires.

Section 1.5

Currency.

All dollar amounts referred to in this Agreement are in Canadian currency, unless otherwise specifically indicated.

ARTICLE 2

EMPLOYMENT POSITION AND DUTIES

Section 2.1

Employment.

The Company hereby confirms the employment of the Executive in the position of Chief Executive Officer on the terms and conditions contained herein, as of and with effect from the Effective Date. In addition, upon consummation of the Arrangement, the Executive shall serve as the Chief Executive Officer of MoSys. The Executive shall report to the Board and the MoSys Board, as applicable. The Executive shall have the duties and responsibilities consistent with his position, including such duties and responsibilities as may be assigned to him from time to time by the Company. Without limiting the foregoing, the Executive expressly acknowledges that, upon consummation of the Arrangement, MoSys may assign him the duties and responsibilities as its Chief Executive Officer and that MoSys or the Company may assign the Executive to perform services for its other Affiliates.

Notwithstanding the Effective Date of this Agreement, the Company and MoSys acknowledge and agree that the Executive has been continuously rendering services to the Company since March 8, 2018, and that the Executive’s prior service with the Company will be recognized by the Company and MoSys for the purposes of the Executive’s employment and this Agreement.

Section 2.2

Term.

This Agreement will be effective from the Effective Date and will continue in effect for an indefinite term until it is terminated in accordance with Article 4 (the “Term”).

Section 2.3

Place of Employment.

The Executive shall provide his duties and perform his services in the City of Toronto (or such other location or locations as may be mutually agreeable between the Executive, the Company and MoSys). The Executive acknowledges that travel may be required in his position.

Section 2.4

Faithful Service.

(1)	During the Term, the Executive shall:

(a)

well and faithfully serve the Company and MoSys, as applicable, and carry out those responsibilities as are necessary to perform the functions associated with his position;

(b)

devote the required skill, experience and attention necessary to carry out the responsibilities consistent with the Executive’s position;

(c)

use his best efforts to promote the success of the business of the Company and MoSys and act at all times in the best interests of the Company and MoSys; and

(d)

devote his full working time and energy to the Company and MoSys and shall not, directly or indirectly, render services to any Person, other than services with regard to charitable or community service organizations or services in connection with other directorships that he currently holds, provided such activities do not, individually or in the aggregate, interfere with the Executive’s duties hereunder or create a potential conflict of interest. The Executive represents that he has disclosed to the Company and MoSys all boards on which he currently sits and will seek the written consent of the Board and the MoSys Board before accepting any further board appointments.

(2)

The Executive acknowledges that he must comply with (i) the lawful policies and procedures established by the Company and MoSys, as applicable, from time to time, including any code of ethics or business conduct adopted by the Company or MoSys (including any future revisions of such policies, procedures or other codes of business conduct) and the Executive acknowledges having been given copies of such policies in advance of executing this Agreement; and (ii) all applicable laws, rules, regulations, and all requirements of all applicable regulatory, self-regulatory and administrative bodies.

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ARTICLE 3

COMPENSATION AND BENEFITS

Section 3.1

Base Salary.

The Company shall pay to the Executive a salary at the rate of USD$400,000 per annum (the “Base Salary”), less applicable deductions and withholdings, payable in accordance with the Company’s regular payroll practices. The Executive’s Base Salary may be adjusted from time to time at the discretion of the Board or the MoSys Board (if such adjustment is being made subsequent to the consummation of the Arrangement) and once adjusted shall thereafter be the Base Salary hereunder.

Section 3.2

Bonus.

The Executive will be eligible to receive an annual, discretionary, bonus, payable in cash or immediately vested restricted share units issued pursuant to the Plan (as defined below) coupled with a cash payment sufficient to cover any withholdings or deductions (the ”Bonus”), with a target of 75% of his Base Salary (the “Target”) and a maximum amount of 125% of his Base Salary. The actual amount and form of the Bonus payable in any fiscal year shall be determined by the Board or the MoSys Board (if such determination is being made subsequent to the consummation of the Arrangement), in its sole discretion, in accordance with the achievement of objectives, both corporate and personal, which will be established by the Board or the MoSys Board (if such targets are established subsequent to the consummation of the Arrangement) in each fiscal year to which the Bonus relates. The Bonus, if any, will be payable following the completion of the fiscal year to which it relates. The Executive’s Bonus for the 2021 fiscal year shall be prorated based on the Effective Date.

The Executive acknowledges that: (i) terms of the Bonus may change each fiscal year at the discretion of the Board or the MoSys Board (if such adjustment is being made subsequent to the consummation of the Arrangement); (ii) he has no expectation that in any fiscal year there will be a guaranteed level of bonus; (iii) the amount of the bonus, if any, that the Executive may be awarded may change from year to year; and (iv) all bonuses are subject to applicable deductions and withholdings.

To be eligible for a Bonus, the Executive must be “Actively Employed”, as defined below in Schedule “A”, throughout the fiscal year to which it relates and on the date the Bonus is paid by the Company. The Executive’s entitlement to Bonus on termination from employment is governed by Article 4 of this Agreement and the “Actively Employed” definition in Schedule “A”.

The Executive confirms that this provision has been specifically drawn to the Executive’s attention.

Section 3.3

Long Term Incentive Compensation.

Subject to the approval of the MoSys Board, the Executive will be eligible to receive a one-time equity incentive award (the “Equity Award”) under the MoSys Amended and Restated 2019 Stock Incentive Plan, as may be amended by MoSys in its sole discretion from time to time (the “Plan”). The type, amount of equity and any other terms for the Equity Award will be determined by the MoSys Board in accordance with the Plan, if and when the Equity Award is made.

The Equity Award, if approved, will be governed by, and will vest in accordance with, the terms and conditions contained in the Plan and the applicable grant agreement(s). A copy of the Plan and the standard form of the grant agreement have been provided to the Executive and the Executive agrees that the consequences of termination of employment have been brought to his attention.

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The Executive understands and agrees that (i) the terms of the Plan and the applicable grant agreement(s) govern any and all rights and obligations that he may have as a result of receiving a grant of awards, (ii) his receipt of any grant shall not constitute a guarantee of continued employment for any particular period of time, and (iii) he has no expectation that a grant will occur at any particular time in a fiscal year. The Executive further understands and agrees that there is no guarantee that the Executive will receive any grant in any particular year, and he shall have no entitlement to any grant, unless and until the award is actually granted to him as evidenced by a grant agreement.

Section 3.4

Benefits

The Executive will be eligible to participate in all of the health and welfare benefit plans (the “Benefits”) in effect from time to time for senior management of the Company, in accordance with the terms of the applicable plan documents, as may be amended from time to time. The Executive shall have no independent right as against the Company in connection with said benefits.

Section 3.5

Vacation.

During each full calendar year, the Executive will be entitled to four (4) weeks’ vacation, which shall accrue as 1.67 days on a monthly basis, in accordance with the Company’s vacation policy. Except as otherwise required by the ESA, the Executive may only carry up to a maximum of five (5) days of unused vacation to the subsequent calendar year. Vacation is to be taken at a time or at times acceptable to, or designated by, the Company having regard to business requirements.

Section 3.6

Expenses.

The Company shall reimburse the Executive for all out-of-pocket expenses reasonably and properly incurred by the Executive in connection with his duties hereunder, provided that such expenses are in accordance with the policies of the Company and MoSys in effect from time to time. To the extent requested by the Company, MoSys or required under such policies, the Executive shall furnish to the Company and MoSys statements and receipts for all such expenses.

Section 3.7

No Other Benefits.

The Executive is not entitled to any other payment, benefit, perquisite, allowance or entitlement other than as specifically set out in this Agreement or as otherwise agreed to in writing by the Company and the Executive.

ARTICLE 4

TERMINATION OF EMPLOYMENT

Section 4.1

Early Termination.

Notwithstanding any other provision in this Agreement, the Executive’s employment and this Agreement may be terminated as follows:

(a)

automatically upon the death of the Executive;

(b)

by the Company or MoSys as a result of the Executive’s Disability;

(c)

by the Company or MoSys at any time for Cause;

(d)

by the Company or MoSys at any time Without Cause;

(e)

by the Executive in the absence of Good Reason at any time by providing written notice to the Board and the MoSys Board specifying the effective date of resignation (such date being not less than one (1) month and not more than three (3) months following the date of the Executive’s written notice, the “Resignation Notice Period”) it being understood the Company or MoSys is under no obligation to utilize the Executive’s services during the Resignation Notice Period;

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(f)

by the Executive for Good Reason; or

(g)

by the Executive (with or without Good Reason) one year or more following a Change of Control.

Termination for purposes of this Agreement shall be interpreted consistently with the definition of “separation from service” as described in United States Treasury Regulation (“Treas. Reg.”) 1.409A-1(h).

Section 4.2

Termination for Cause or Voluntary Resignation.

(a)

If this Agreement and the Executive’s employment is terminated pursuant to subsection 4.1(c), then the Company shall pay to the Executive: (i) his accrued and unpaid Base Salary and any other wages required by the ESA to be paid up to and including the Termination Date; (ii) any accrued and outstanding vacation pay; (iii) reimbursement for business expenses properly incurred to the Termination Date (collectively, the ”Basic Entitlements”); (iv) statutory benefits continuation and continued vacation accrual to the end of any minimum notice of termination period that is required to be provided to the Executive pursuant to the ESA (the “ESA Notice Period”); and (v) the sum of: (X) pay in lieu of notice of termination in the amount required pursuant to the ESA; and (Y) statutory severance pay (if applicable) in the amount required to be provided pursuant to the ESA. For clarity, and except as required by the ESA: (i) the Executive shall not be entitled to any Bonus, pro-rated or otherwise, in respect of the fiscal year in which termination occurs; and (ii) any awards the Executive holds pursuant to the Plan will be treated in accordance with the terms of the Plan and any applicable grant agreement(s) issued thereunder.

(b)

If this Agreement and the Executive’s employment is terminated pursuant to subsection 4.1(e), then the Company shall pay to the Executive the Basic Entitlements. For clarity, and except as required by the ESA: (i) the Executive shall not be entitled to any Bonus, pro-rated or otherwise, in respect of the fiscal year in which termination occurs; and (ii) any awards the Executive holds pursuant to the Plan will be treated in accordance with the terms of the Plan and any applicable grant agreement(s) issued thereunder.

The Executive confirms that this provision has been specifically drawn to the Executive’s attention.

Section 4.3

Termination Without Cause, for Good Reason, Upon Change of Control, Death or Disability

If this Agreement and the Executive’s employment are terminated as a result of the death of the Executive pursuant to subsection 4.1(a), by the Company or MoSys as a result of the Executive’s Disability pursuant to subsection 4.1(b), by the Company or MoSys without Cause pursuant to subsection 4.1(d), by the Executive for Good Reason pursuant to subsection 4.1(f), or by the Executive (with or without Good Reason) one year or more following a Change of Control pursuant to subsection 4.1(g), then the Company will provide the Executive with only the following:

(a)

the Company shall pay to the Executive the Basic Entitlements, with vacation pay accrued through to the end of any ESA Notice Period;

(b)

the Company shall pay to the Executive the greater of:

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(i)

the sum of: (X) pay in lieu of notice of termination, in the amount required pursuant to the ESA; and (Y) statutory severance pay (if applicable) in the amount required to be provided pursuant to the ESA; or

(ii)

twenty-four (24) months (such period, the “Severance Period”) of Base Salary in lieu of notice, calculated solely by reference to the Base Salary except and only to the extent as otherwise minimally required by the ESA, to be paid in the form of a lump sum;

(c)

the Company shall pay to the Executive any Bonus awarded but not yet paid in respect of the fiscal year preceding the Termination Date and shall pay to the Executive his Bonus for the year in which his employment terminates, calculated at Target, pro-rated to the end of the ESA Notice Period;

(d)

the Company shall continue to pay its premium to provide all benefits (as existed on the date notice of termination is provided) for the duration of the Severance Period; provided that, if the Company cannot continue any particular benefit pursuant to the terms of the relevant plan or policy and after due inquiry with any third party insurer, then the Company’s obligations shall be limited continuing such benefits until the end of the ESA Notice Period;

(e)

notwithstanding the provisions of the Plan, any unvested equity and equity-related compensation that has been issued to the Executive under the Plan shall immediately be accelerated and vested as of the Termination Date;

(f)

notwithstanding the provisions of the Plan, any vested equity and equity-related compensation that has been issued to the Executive under the Plan shall remain exercisable until twenty-four (24) months following such termination. The Company hereby confirms that all required approvals have been obtained in connection with the variances from the Plan, as herein provided; and

(h)

any other benefits and/or perquisites provided to the Executive and not otherwise addressed in this Section 4.3 shall continue until the end of the ESA Notice Period.

All such payments made pursuant to this Section 4.3 shall be paid in accordance with the ESA; provided; however, that, notwithstanding the ESA, in no event shall any payments be made later than thirty days from the Executive’s termination, unless the Executive is subject to the “six-month delay” rule under Treas. Reg. § 1.409A-3(i)(2)(i), in which case it shall be paid six months and one day from the date of termination. The Executive understands and agrees that he will not be entitled to any common law notice or payments in lieu with respect to the termination of his employment in accordance with this Section 4.3 and by entering into this Agreement, the Executive voluntarily waives such notice or payments / damages in lieu and agrees to provide the Company or MoSys a waiver of such notice or payments / damages in lieu and the release as provided in Section 4.6 within thirty days of termination.

For the avoidance of doubt, the Executive voluntary waives any and all rights, payments or other benefits that may be payable or offered pursuant to the MoSys Executive Change-In-Control And Severance Policy, as amended from time to time in accordance with its terms, and that the Executive shall only be entitled to the rights, payments or other benefits payable or offered pursuant to the terms of this Agreement.

The Executive confirms that this provision has been specifically drawn to the Executive’s attention.

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Section 4.4

Bonus and Long Term Incentive Compensation

Except as may be required by the minimum extent of the ESA or as expressly set out herein, if the Executive’s employment ceases for any reason, the Executive’s right to any Bonus payment or any amounts with respect to such Bonus payment shall expire on the cessation of active employment, regardless of whether notice of termination was given or not given and regardless of whether the termination is lawful or unlawful (e.g., constructive dismissal). This includes where the Executive’s employment is terminated Without Cause, For Cause, Upon Change of Control, Death, Disability or for Good Reason, except as may be required by the minimum extent of the ESA or as expressly set out above and the Executive will not, except as may be required by the minimum extent of the ESA or as expressly set out above, be entitled to a Bonus payment as part of any common law right for compensation or damages related to any termination of employment (including resignation and constructive dismissal).

The Executive and Company acknowledge and agree that, except as set out herein: (i) there will be no further grant of awards under the Plan after the Termination Date; and (ii) the Executive will not be entitled to any damages or compensation in respect of any further awards, pro-rated or otherwise, which may have vested, been granted or paid to the Executive after the Termination Date. The Executive agrees that he will not have any claim to common law damages in respect of any outstanding awards and his only entitlement in respect of the awards is as provided in the Plan and the applicable grant agreement(s). For certainty, the Executive hereby waives any right to any damages or compensation for any failure to grant an award following the Termination Date.

The Executive confirms that this provision has been specifically drawn to the Executive’s attention.

Section 4.5

Mitigation.

The Executive is not required to mitigate any of the amounts payable under this Article 4.

Section 4.6

Release.

The Executive understands and agrees that the provisions of Section 4.3 are fair and reasonable, and that the payments, benefits and entitlements referred to in Sections 4.3 hereof are inclusive of any statutory payments and benefits, and are reasonable estimates of the damages which will be suffered by the Executive in the event of the termination of this Agreement and of his employment with the Company, including in the event of a constructive dismissal (in which case Section 4.3 shall apply). Except as otherwise provided in Section 4.3, the Executive shall not be entitled to any further notice of termination, payment in lieu of notice of termination, severance, bonus, damages, or any additional compensation whatsoever, whether at common law or otherwise.

The Executive understands and agrees that he will not be entitled to any common law notice or payments in lieu with respect to the termination of his employment in accordance with Section 4.3 and, by entering into this Agreement, the Executive voluntarily waives such notice or payments / damages in lieu. The Executive waives the right to receive damages or payment in lieu of any forfeited Bonus payment.

As a condition precedent to receiving any payment or benefits pursuant to Section 4.3 hereof that exceed the Executive’s entitlements pursuant to the ESA (which, for certainty, will be satisfied by the Company), the Executive agrees to deliver a full and final release from all actions or claims in connection therewith in favour of the Company, the Company’s affiliates (including MoSys), and all of their respective officers, directors, trustees, shareholders, employees, lawyers, insurers and agents, such release to be in a form satisfactory to the Company and MoSys, if applicable.

The Executive confirms that this provision has been specifically drawn to the Executive’s attention.

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Section 4.7

Resignation as Director and Officer.

The Executive agrees that, upon termination of his employment for any reason whatsoever, the Executive shall thereupon be deemed to have immediately resigned any position the Executive may have as an officer, director or employee of the Company together with any other office, position or directorship which the Executive may hold with the Company or any of the Company’s Affiliates, subsidiaries, or other related entities. In such event, the Executive shall, at the request of the Company and MoSys, if applicable, forthwith execute any and all documents appropriate to evidence such resignations. The Executive shall not be entitled to any payments in respect of such loss of office/directorship.

Section 4.8

Return of Property.

All equipment, keys, pass cards, credit cards, software, material, written correspondence, memoranda, communication, reports, or other documents or property pertaining to the business of the Company or MoSys used or produced by the Executive in connection with his employment, or in his possession or under his control, shall at all times remain the property of the Company and MoSys, as applicable. The Executive shall return all property of the Company or MoSys in his possession or under his control in good condition forthwith upon any request by the Company or MoSys, as applicable, or upon any termination of this Agreement and of the Executive’s employment (regardless of the reason for such termination).

ARTICLE 5

EXECUTIVE’S COVENANTS

Section 5.1

Company Property.

The Executive acknowledges that all materials of the Company or MoSys relating to the business and affairs of the Company or MoSys, including, without limitation, all developments, manuals, documents, reports, equipment, working materials and lists of customers or suppliers prepared by the Company, MoSys or by the Executive in the course of the Executive’s employment are for the benefit of the Company and MoSys, as applicable, and are and will remain the property of the Company or MoSys, as applicable.

Section 5.2

Confidentiality and Intellectual Property Rights.

The Executive agrees to execute and be bound by the terms of the Employment, Confidential Information, Invention Assignment and Arbitration Agreement, set out in Schedule “B” hereto.

Section 5.3

Authorized Disclosures.

Nothing in this Agreement shall prevent or limit the Executive from communicating with or reporting to, without notice to or approval from the Company, any government agency responsible for enforcement of any laws any information or suspected violation of law by the Company, provided the Executive acts in good faith and only discloses such information as is necessary for reporting purposes.

ARTICLE 6

NON-COMPETITION

Section 6.1

Non-Competition.

(a)

for any undertaking or business which is competitive, in any way, with the Business, carry on or be engaged in a capacity that is the same as, or similar to, the position occupied by the Executive during the last (2) two years of the Executive’s employment with the Company (or, if shorter, such period as the Executive is/was employed); or

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(b)

have any financial interest in, or be otherwise commercially involved in, any undertaking or business which is competitive, in any way, with the Business.

Section 6.2

Exception.

The Executive will, however, not be in default under Section 6.1 by virtue of the Executive owning, solely as a passive investment, not more than two percent (2%) of the issued securities of an entity, the securities of which are listed on a recognized stock exchange or traded in the over-the-counter market in Canada or the United States, which carries on a business that competes with the Business.

ARTICLE 7

NON-SOLICITATION

Section 7.1

Non-Solicitation of Customers, Prospective Customers and Suppliers.

The Executive shall not, during the Term (including, for certainty, any portion of the Resignation Notice Period) and for a period of twelve (12) months immediately following the cessation of the Executive’s employment, for any reason, on his own behalf or on behalf of or in connection with any other Person, without the prior written consent of Company, whether directly or indirectly, in any capacity whatsoever, alone, or through or in connection with any Person, solicit the business of (or assist in the soliciting of the business of) any Customer, Prospective Customer or Supplier for any purpose which is competitive with the Business, including for the purpose of having a Customer, Prospective Customer or Supplier cease doing business with the Company.

Section 7.2

Non-Solicitation of Employees.

(a)

solicit the employment or engagement of or otherwise entice away from the employment or engagement of the Company or any of its Affiliates, any individual who is employed or engaged by the Company or any of its Affiliates, whether or not such individual would commit any breach of his contract or terms of employment or engagement by leaving the employ or the engagement of the Company or any of its Affiliates; or

(b)

assist any Person to solicit the employment or engagement of any individual who is employed or engaged by the Company or any of its Affiliates with whom the Executive had material contact in the course of the Executive’s employment with the Company during the two (2) year period immediately prior to the Termination Date, or otherwise entice any such individual away from the employment or engagement of the Company or any of its Affiliates.

For clarity, the placement by the Executive of advertising in a newspaper, magazine, recruitment website, online or social medial platform, or other publication of general circulation (save and except LinkedIn, which would constitute a solicitation), or the engagement of a personnel search agency by the Executive generally (i.e. not specifically in respect of the Company), that results in an employee or other individual engaged by the Company leaving the employment of or engagement with the Company shall not be considered a violation of this Section 7.2.

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ARTICLE 8

RECOGNITION

Section 8.1

Recognition.

(1)	The Executive expressly recognizes that Article 5, Article 6 and Article 7 of this Agreement are of the essence of this Agreement, and that the Company would not have entered into this Agreement without the inclusion of those provisions and the Executive’s commitment to abide by same.

(2)	The Executive further recognizes and expressly acknowledges that the application of Article 5, Article 6 and Article 7 of this Agreement will not have the effect of prohibiting him from earning a living in a satisfactory manner in the event of the termination of this Agreement and his employment.

(3)

The Executive further recognizes and expressly acknowledges that Article 5, Article 6 and Article 7 of this Agreement grant to the Company and MoSys only such reasonable protection as is necessary to preserve the legitimate interests of the Company and MoSys and the Executive equally recognizes, in this respect, that the description of the Business is accurate and the definition of the Territory is reasonable.

(4)	The Executive further acknowledges he is a fiduciary and that nothing in Article 5, Article 6 and Article 7 is intended to limit the fiduciary obligations that the Executive owes to the Company and MoSys, as applicable.

Section 8.2

Remedies.

The Executive hereby recognizes and expressly acknowledges that the Company and MoSys, would be subject to irreparable harm should any of the provisions of Article 5, Article 6 or Article 7 be infringed, or should any of the Executive’s obligations hereunder be breached by the Executive, and that damages alone will be an inadequate remedy for any breach or violation thereof and that the Company and MoSys, in addition to all other remedies, will be entitled as a matter of right to equitable relief, including temporary or permanent injunction to restrain such breach.

Section 8.3

Suspension or Termination of Benefits and Compensation.

In the event that the Company or MoSys determine that, without the express written consent of the Company or MoSys, the Executive has breached any provisions of Article 5, Article 6 or Article 7 of this Agreement, the Company and MoSys will each have the right to suspend or terminate any or all remaining payments and/or benefits, if any, referenced in Section 4.3 of this Agreement in excess of the Executive’s entitlements pursuant to the ESA. Such suspension or termination of payments and/or benefits will be in addition to and will not limit any and all other rights and remedies as set out in Section 8.2 of this Agreement that the Company or MoSys may have against the Executive.

ARTICLE 9

NON-DISPARAGEMENT

Section 9.1

Non-Disparagement.

The Executive covenants and agrees that he shall not, during and following the Term, engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks (including, without limitation, the repetition or distribution of derogatory rumours, allegations, negative reports or comments) which are disparaging, deleterious or damaging to the integrity, reputation or goodwill of the business or the Company, its Affiliates or its employees.

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ARTICLE 10

CONFLICTING OBLIGATIONS

Section 10.1

No Conflicting Obligations.

The Executive represents and warrants to the Company that:

(a)

there exists no agreement or contract, and he is not subject to any obligation, which restricts him from (i) being employed by the Company; (ii) performing the duties assigned to him pursuant to this Agreement; (iii) soliciting the business of any Person; or (iv) using information within his knowledge or control which may be useful in the performance of his duties for the Company;

(b)

in the performance of his duties for the Company, he shall not improperly bring to the Company or use any trade secrets, confidential information or other proprietary information of any third party; and

(c)

he shall not infringe the Intellectual Property of any third party.

ARTICLE 11

GENERAL

Section 11.1

Notices.

Any notice, demand or other communication which is required or permitted by this Agreement to be given or made by a party hereto must be in writing and be sufficiently given if delivered personally or sent by pre-paid registered mail, to the Company at its head office in [Toronto, Ontario], and to the Executive at his home address or email address as contained in the Company’s payroll records from time to time. Every notice or other communication will be deemed to have been received, (i) on the date of receipt, if given by personal delivery or email, and (ii) the fifth Business Day after which it is mailed, if sent by registered mail. Notwithstanding the foregoing, if a strike or lockout of postal service is in effect, or generally known to be impending, notice must be effected by personal delivery.

Section 11.2

Survival.

Notwithstanding the termination of this Agreement, each party shall remain bound by the provisions of this Agreement which by their terms impose obligations upon that party that extend beyond the termination of this Agreement.

Section 11.3

Further Assurances.

The parties shall, with reasonable diligence, do all things and provide all reasonable assurances as may be required to give effect to this Agreement and carry out its provisions, including providing such further documents or instruments reasonably required by any other party.

Section 11.4

Assignment.

Except as otherwise expressly provided herein, neither this Agreement nor any rights or obligations are assignable by the Executive. The Company may, with the prior written consent of the Executive, assign this Agreement to any of its Affiliates, subsidiaries or to any successor (whether direct or indirect, by purchase, amalgamation, arrangement, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company. The Executive, by the Executive’s signature hereto, expressly consents to such assignment and, provided that such successor agrees to assume and be bound by the terms and conditions of this Agreement, all references to the “the Company” herein shall include its successor.

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Section 11.5

Entire Agreement.

This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, including but not limited to any other understandings, negotiations and discussions, whether oral or written, of the parties hereto and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein.

Section 11.6

Amendment and Waiver.

Except as permitted by the terms of any Plan, no supplement, modification, amendment or waiver of this Agreement will be binding unless executed in writing by both parties. No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar) nor will such waiver constitute a continuing waiver unless otherwise expressly provided.

Section 11.7

Accessibility.

The Company has policies in place to accommodate its employees with disabilities. Should the Executive require accommodation or have a question regarding any of these policies, he may contact the Company’s Human Resources Department.

Section 11.8

Suspension with Pay.

The Executive acknowledges that, during the course of the Executive’s employment, the Board may exercise its discretion to suspend the Executive with pay in furtherance of any internal investigation relating to the Executive’s conduct.

Section 11.9

Compliance with Employment Standards Legislation.

In the event that the minimum standards set out in the ESA are more favourable to the Executive in any respect than a term or provision provided for in this Agreement, including without limitation the terms set out in Article 4 above, the Executive and the Company agree that the statutory provisions will, instead, apply in respect of that term or provision.

Section 11.10

Successors and Assigns.

This Agreement will enure to the benefit of and be binding upon the parties and their respective heirs, executors and administrators or successors and permitted assigns, as the case may be.

Section 11.11

Preamble/Recital.

The Executive and the Company acknowledge and agree that the provisions contained in the preamble/recital section of this Agreement form part of this Agreement and may be relied upon by either party.

Section 11.12

Severability.

If any provision in this Agreement is determined to be invalid, void or unenforceable by the decision of any court of competent jurisdiction, which determination is not appealed or appealable for any reason whatsoever, the provision in question will not be deemed to affect or impair the validity or enforceability of any other provision of this Agreement and such invalid or unenforceable provision or portion thereof will be severed from the remainder of this Agreement.

Section 11.13

Independent Legal Advice and Acknowledgment

The Executive acknowledges that he has been advised to obtain, and that he has obtained or has been afforded the opportunity to obtain, independent legal advice with respect to this Agreement and that he understands the nature and consequences of this Agreement.

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The Executive explicitly confirms that provisions regarding his entitlements upon termination, specifically Sections 3.2, 4.2, 4.3, 4.4, 4.6, and the definition of “Actively Employed” in Schedule “A”, has been specifically drawn to the Executive’s attention. By executing below, the Employee acknowledges acceptance of the terms of these provisions.

Section 11.14

Governing Law.

This Agreement will be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

Section 11.15

Counterparts.

This Agreement may be executed by the parties in one or more counterparts, each of which when so executed and delivered will be deemed to be an original and such counterparts will together constitute one and the same instrument.

Section 11.16

Third-Party Beneficiaries.

Nothing in this Agreement, express or implied, is intended or shall be construed to create any third-party beneficiaries, other than MoSys. MoSys is expressly intended as a third-party beneficiary of this Agreement.

Section 11.17

Section 409A.

It is the intention of the parties that compensation or benefits payable under the Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Internal Revenue Code, and the Agreement shall be interpreted accordingly. To the extent such potential payments or benefits could become subject to additional tax under such Section 409A, the parties shall cooperate to amend this Agreement with the goal of giving Executive the economic benefits described herein in a manner that does not result in such tax being imposed. Each installment of any award payment shall be treated as a separate payment for purposes of Section 409A.

[Signature page follows.]

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IN WITNESS WHEREOF the parties have executed this Agreement:


PERASO TECHNOLOGIES INC.

By:		/s/ Imed Zine
		Authorized Signatory

Agreed to and accepted this 17^th day of December, 2021.


		/s/ Ron Glibbery
Witness		RON GLIBBERY

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SCHEDULE “A”

DEFINITIONS

“Affiliate” means any Person that directly or indirectly controls, is controlled by or is under common control with the Company, and “control” means the possession, directly or indirectly of the power to direct, or cause the direction of, the management and policies of a Person, whether through the ownership of voting securities or other interests, by contract or otherwise.

“Actively Employed” means the period during which an Executive performs work for the Company. “Actively Employed” shall be deemed to include: (a) any period of vacation, disability, or other leave required to be permitted by legislation; and (b) the ESA Notice Period, if any. For certainty, “Actively Employed” shall be deemed to exclude any other period that follows or ought to have followed the later of (i) the end of the ESA Notice Period (if any), or (ii) the Executive’s last day of performing work for the Company (including any period of vacation, disability, or other leave required to be permitted by legislation) whether that period arises from a contractual or common law right. For further clarity, except as may be required by the minimum extent of the ESA, the Executive will not be considered actively employed or in active employment during any period in which the Executive is receiving any compensation or payments related to the cessation of the Executive’s employment, including payment of salary or other amounts.

“Board” means the Board of Directors of the Company, as is constituted from time to time.

“Business” means the business of developing, marketing, and selling mmwave semiconductor systems.

“Business Day” means any day of the year which the Toronto Stock Exchange is open for business.

“Cause” means the Executive’s

(a)

personal and willful failure to comply with any applicable laws, rules or regulations of any federal, state, provincial or local authority having jurisdiction over the Company and MoSys and/or their respective operations, and resulting in material harm to the Company and/or MoSys;

(b)

willful act or omission which constitutes or results in, directly or indirectly, a material breach of Executive’s obligations under this Agreement, and/or the Employment, Confidential Information, Invention Assignment and Arbitration Agreement;

(c)

act or omission which constitutes gross negligence, gross misconduct or willful misconduct in carrying out Executive’s duties with respect to the Company or MoSys;

(d)

willful commission of any act which constitutes a material conflict of interest with the Company or MoSys, or a breach of the fiduciary duties owed by Executive to the Company or MoSys;

(e)

willful engagement in illegal conduct that is materially injurious to the Company and/or MoSys, whether or not resulting in criminal indictment or conviction (or Canadian equivalents);

(f)

commission of any act of theft, embezzlement, bribery, corruption, misappropriation or fraud involving the Company, MoSys, or their respective assets, whether or not resulting in criminal indictment or conviction (or Canadian equivalents); or

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(g)

commission of any criminal offense constituting (x) a felony or (y) a misdemeanor (excluding minor traffic violations), or equivalent crime under the laws of Canada or Ontario, or other crime involving moral turpitude, whether or not in the course of Executive’s duties or resulting in a criminal indictment or conviction.

For purposes of the definition of “Cause” under this Agreement, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company or MoSys. Any act, or failure to act, based on authority given pursuant to a resolution duly adopted by the Company or on the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company or MoSys.

Notwithstanding the foregoing, prior to the Company’s determination of Cause above, the Company must first provide written notice to the Executive specifying in reasonable detail the basis for Cause, and shall afford Executive ten (10) Business Days to cure the circumstances or basis constituting the Cause, unless the Company, in its reasonable judgment, determines that such Cause condition is incapable of being cured. The Company may place the Executive on paid leave for up to 60 days while it is determining whether there is a basis to terminate the Executive’s employment for Cause. Any such action by the Company will not constitute Good Reason.

“Change of Control” means the occurrence of any of the following:

(a)

an acquisition after the Effective Date by an individual, an entity or a group in one or more related transactions (excluding MoSys or an employee benefit plan of MoSys or a corporation controlled by the stockholders of MoSys) of 45% or more of the common stock or voting securities of the Company or MoSys; or

(b)

a consummation of a complete liquidation or dissolution of the Company or MoSys or a merger, consolidation, reorganization or sale of all or substantially all of the assets of the Company or MoSys (collectively, a “Business Combination”), other than a Business Combination in which

(i)

the stockholders of MoSys or the Company receive (or continue to own) 50% or more of the stock of the corporation resulting from the Business Combination;

(ii)

at least a majority of the board of directors of such resulting corporation were incumbent directors of the Company or MoSys immediately prior to the consummation of the Business Combination, and

(iii)

after which no individual, entity or group (excluding any corporation or other entity resulting from the Business Combination or any employee benefit plan of such corporation or of MoSys) who did not own 45% or more of the stock of the resulting corporation or other entity immediately before the Business Combination owns 45% or more of the stock of such resulting corporation or other entity.

“Customer” means any Person who, during the Term (including, for certainty, the any portion of the Resignation Notice Period), or in the case of termination of employment (for any reason), within the twelve (12) month period immediately preceding the Termination Date, has purchased, leased or licensed from the Company or its Affiliates, with the Executive’s knowledge or assistance, any product or services produced, sold, licensed, or distributed by the Company in respect of the Business.

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“Disability” means the Executive’s inability to substantially fulfil his duties on behalf of the Company, due to physical or mental incapacity, for a continuous period of ninety (90) days or more and provided that there is no reasonable prospect that the Executive will return to work in the foreseeable future, with or without reasonable accommodation; and if there is any disagreement between the Company and the Executive as to the Executive’s Disability or as to the date any such Disability began or ended, such disagreement will be determined by a physician mutually acceptable to the Company and the Executive whose determination will be conclusive evidence of any such Disability and of the date any such Disability began or ended. . If the Executive and the Company cannot agree as to a physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Executive shall be final and conclusive for all purposes of this Agreement. In connection with the foregoing, Executive shall cooperate with such physician, including without limitation by submitting to such medical tests and examinations as may be requested by the medical doctor.

“ESA” means the Ontario Employment Standards Act, 2000, as may be amended from time to time.

“Good Reason” shall mean the occurrence of any of the following events without the Executive’s consent:

(a)

a material reduction in Executive’s then-current Base Salary or annual target Bonus (expressed as a percentage of Executive’s then-current Base salary), except for a reduction proportionate to reductions concurrently imposed on all other members of the Company’s executive management;

(b)

a material reduction in Executive’s then-current employee benefits package, taken as a whole, except for a reduction proportionate to reductions concurrently imposed on all other members of the Company’s executive management;

(c)

a material reduction in Executive’s responsibilities with respect to the Company’s overall operations, such that continuity of responsibilities with respect to business operations existing prior to a corporate transaction will serve as a material reduction in responsibilities if such business operations represent only a subsidiary or business unit of the larger Company after the corporate transaction;

(d)

a material adverse change in the reporting structure applicable to the Executive;

(e)

a material breach by the Company of any material provision of Executive’s then-current employment agreement (if any);

(f)

a requirement that Executive relocate Executive’s Company office to a location more than 35 miles from Executive’s then-current Company office location, unless such office relocation results in the distance between the new office and Executive’s home being closer or equal to the distance between the prior office and Executive’s home;

(g)

a failure of a successor or transferee to assume the Company’s obligations under this Agreement; or

(h)

a failure to nominate Executive for election as a Board director if at the proper time for nomination, the Executive is a Board member

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Notwithstanding the foregoing, Good Reason shall be deemed not to exist, unless (i) the Executive gives the Company written notice within ninety (90) days after the occurrence of the event that constitutes the basis for Good Reason, specifying the particular act or failure to act which he believes constitutes the basis for Good Reason; (y) the Company fails to cure such act or failure to act, if curable, within thirty (30) days after receipt of such notice (the “Cure Period”); and (ii) the Executive terminates his employment for Good Reason within thirty (30) days following the expiration of the Cure Period.

“Intellectual Property” shall mean all common law, statutory and other intellectual and industrial property rights, including, without limiting the generality of the foregoing:

(h)

rights to any patents, trademarks, service marks, trade names, domain names, copyright, database rights, designs, industrial designs, trade secrets, integrated circuit rights and topography rights; and

(i)

all domestic and foreign registrations, applications, divisionals,

(j)

continuations, continuations-in-part, re-examinations and renewals thereof.

“MoSys Board” means the Board of Directors of MoSys, as is constituted from time to time.

“Person” means a natural person, partnership, limited partnership, limited liability partnership, company, joint stock company, trust, unincorporated association, joint venture or other entity or governmental entity, and pronouns have a similarly extended meaning.

“Prospective Customer” means (i) any Person solicited by the Executive on behalf of the Company or its Affiliates for any purpose relating to the Business at any time during the Term (including, for certainty, any portion of the Resignation Notice Period), and in the case of termination of employment (for any reason), within the twelve (12) month period immediately preceding the Termination Date; or (ii) any Person solicited by the Company with the Executive’s knowledge for any purpose relating to the Business at any time during the Term (including, for certainty, any portion of the Resignation Notice Period), and in the case of termination of employment (for any reason), within the twelve (12) month period immediately preceding the Termination Date.

“Supplier” means any Person who, during the Term (including, for certainty, any portion of the Resignation Notice Period), or in the case of termination of employment (for any reason), within the twelve (12) month period immediately preceding the Termination Date, has sold to the Company or its Affiliates, with the Executive’s knowledge or assistance, any products or services that are or may be used by the Company as an integral part of the Business.

“Termination Date” means the last day on which the Executive is Actively Employed.

“Territory” means the countries of Canada and the United States of America.

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SCHEDULE “B”

EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT, AND ARBITRATION

AGREEMENT

As a condition of my employment with MoSys, Inc., its subsidiaries, affiliates, successors or assigns (together, the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following provisions of this Employment, Confidential Information and Invention Assignment Agreement (this “Agreement”):

1. Confidential Information.

(a) Company Information. I agree at all times during the term of my employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, any Confidential Information of the Company. I further agree not to make any unauthorized disclosure of Confidential Information of the Company to any person, firm or corporation. I understand that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term of my employment), markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, forecasting, prices or other business information disclosed to me by the Company either directly or indirectly, in writing, orally or by drawings or observation of parts or equipment. I further, understand that Confidential Information does not include any of the foregoing items that has become publicly known and made generally available absent a breach of this Agreement, or through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.

(b) Former Employer Information. I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

(c) Third Party Information. I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party.

2. Inventions.

(a) Inventions Retained and Licensed. I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, patents, patent pending, improvements, and trade secrets which were made by me prior to my employment with the Company and in which I have an ownership interest (collectively referred to as “Prior Inventions”), which relate to the Company’s current or proposed business, products or research and development, and that are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. If such a Prior Invention is incorporated into a product, process or machine of the Company, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use, sublicense, and sell such Prior Invention as part of or in connection with the Company’s or its sublicensees’ products, processes or machines.

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(b) Assignment of Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, (collectively referred to as “Inventions”), which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived, developed or reduced to practice, during the period of time that I am in the employ of the Company, including, without limitation, all Inventions that I may conceive, develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during work hours, after work hours or on weekends or during breaks, whether at or outside of the Company’s premises, except as provided in Section 3(f) below. I further acknowledge that all original works of authorship that are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.

I acknowledge that I have reviewed and understood the definition of “works made for hire” per the 1976 Copyright Act, located at: https://www.copyright.gov/circs/circ30.pdf . I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such invention.

(c) Inventions Assigned to the United States. I agree to assign to the United States government all my right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

In the event that the Company files a patent application for any Invention, I agree and acknowledge that such a patent filing would mean that I believe myself to be the inventor of the Invention without deriving it from another, that the Company is the real party in interest, that the Company is filing the patent application in my name as the inventor, that I do assign to the Company all rights to such Invention, and that the Company is applying for a patent on my behalf and that I have a duty of disclosure and candor before the United States Patent Office. For purposes of such patent application, I appoint the Company as attorney-in-fact, with power to execute all necessary documents, including making substitute statements on my behalf.

In the event that the Company files a patent application for any Invention, I agree to fully cooperate with the Company in the patent application process and to promptly execute all documents associated with the filing of the patent application, such as to fully and truthfully execute an assignment document to the Company and a Declaration for Utility or Design Patent Application in compliance with 37 C.F.R. § 1.63 (the latter available at http://www.uspto.gov/forms/index.jsp#).

(d) Maintenance of Records. I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times. I further agree and warrant to keep such records in the Company offices, and I will not keep them at home or at any location outside of the Company.

(e) Patent and Copyright Registrations. I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which

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the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

(f) Exception to Assignments. I understand that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention that qualifies fully under the provisions of California Labor Code section 2870 (attached hereto as Exhibit B). I will advise the Company promptly in writing of any inventions that I believe meet the criteria in California Labor Code section 2870 and not otherwise disclosed on Exhibit A.

3. Conflicting Employment. I agree that, during the term of my employment with the Company, I will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the term of my employment, nor will I engage in any other activities that conflict with my obligations to the Company.

4. Returning Company Documents. I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, media, computer disks, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors or assigns, including, without limitation, those records maintained pursuant to paragraph 3(d). In the event of the termination of my employment, I agree to sign and deliver the “Termination Certification” attached hereto as Exhibit C.

5. Representations. I agree and warrant to execute any proper oath or to verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith.

6. Arbitration and Equitable Relief; MUTUAL WAIVER OF THE RIGHT TO A JURY TRIAL.

(a) I agree that any disputes with anyone (including, but not limited to, the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from my employment with the Company or the termination of my employment with the Company shall be resolved only by an arbitrator through final and binding arbitration, pursuant to the then current Employment Arbitration Rules (the “Rules”) of the JAMS (Judicial Arbitration & Mediation Services) (available at https://www.jamsadr.com/rules-employment-arbitration/) or, at the Parties’ option, under the American Arbitration Association’s National Rules for the Resolution of Employment Disputes (available at www.adr.org), and not by way of court or jury trial. The location of the arbitration proceeding shall be in the general geographical vicinity of the place where I last worked for the Company, unless each party to the arbitration agrees in writing otherwise. I acknowledge that I have reviewed and understood the Rules, and also acknowledge and understand that such Rules are updated on JAMS’ website noted above, for my review now and in the future.

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(b) I agree that any dispute regarding any aspect of this Agreement, including, but not limited to, confidentiality provisions, harassment, discrimination, wrongful termination, any statutory claims, etc.). I understand that this Agreement to arbitrate, the Rules and California law also apply to any disputes which the Company may have with me.

(c) I agree that any arbitration shall be submitted exclusively to final and binding arbitration before a mutually agreed upon arbitrator in accordance with the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1, et seq., and further agree that the FAA applies to the exclusion of the California Arbitration Act. If I and the Company cannot agree on an arbitrator, then an arbitrator will be selected using the alternate striking method from a list of five (5) neutral arbitrators provided by the applicable JAMS Rule. To initiate arbitration, I may contact JAMS or AAA for a form Demand for Arbitration. Each party will pay the fees for their own counsel, subject to any remedies to which that party may later be entitled under applicable law. However, in all cases where required by applicable law, the Company will pay the arbitrator’s fees and the arbitration costs. If under applicable law the Company is not required to pay the arbitrator’s fees and the arbitration costs, then such fees and costs will be apportioned equally between each set of adverse parties.

(d) I agree that the arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions requesting that a judgment be awarded on any claims raised in arbitration. I also agree that the arbitrator shall be empowered to award any appropriate relief, including remedies at law, in equity or injunctive relief (including a temporary restraining order). The arbitrator may award any party any remedy to which that party is entitled under applicable law, but such remedies shall be limited to those that would be available to a party in a court of law for the claims presented to and decided by the arbitrator. The arbitrator will issue a decision or award in writing, stating the essential findings of fact and conclusions of law. A court of competent jurisdiction shall have the authority to enter a judgment upon the award made pursuant to the arbitration proceeding.

(e) I agree that this arbitration shall be the exclusive means of resolving any dispute under this Agreement and that no other action will be brought by them in any court or other forum.

(f) Except as may be permitted or required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties.

(g) I understand that this Agreement does not prohibit me from pursuing an administrative claim with a local, state or federal administrative body (such as the Ontario Ministry of Labour, California Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the National Labor Relations Board or state workers’ compensation board), but claims may be brought only to the extent applicable law permits access to such an agency notwithstanding the existence of an agreement to arbitrate. However, there will be no right or authority for any dispute to be brought, heard or arbitrated as a class or collective action.

Breach of Confidentiality or Other Provisions of This Agreement.

7. General Provisions. Any breach of this Agreement by me will be considered a material breach. I acknowledge and agree that in the event of such a breach or threatened breach, in addition to the other remedies provided by law and equity including, but not limited to injunctive relief and damages. In addition, the Company will be further entitled to recover its reasonable attorney’s fees and costs incurred in enforcing this Agreement or seeking relief for any breach.

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(a) Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of California irrespective of (1) California’s choice of law principles, (2) where the contract is signed; and /or (3) the location where I work. I will not bring any action arising from or related to this Agreement except in Santa Clara County, California, and I expressly consent to personal jurisdiction and proper venue by and in Santa Clara County, California.

(b) Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and supersedes all prior negotiations, agreements and understandings with respect thereto, including without limitation any and all prior non-disclosure and invention assignment agreements. No modification of or amendment to this Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

(c) Severability. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(d) Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

(e) Waiver of Delay. I understand that any express waiver or waiver by failure to exercise promptly any right under this Agreement by the Company will not create a continuing waiver or expectation of non-enforcement.

I acknowledge and agree to each of the following items:

(a)

I am executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else; and

(b)

I have carefully read this Agreement and the JAMS Arbitration Rules. I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and fully understand them, INCLUDING THAT I AM WAIVING MY RIGHT TO A JURY TRIAL BY SIGNING BELOW; and

(c)

I was encouraged to seek the advice of an attorney before signing this Agreement and the Company provided me with sufficient time for an attorney to review this Agreement before I signed it.


DATE:

				SIGNATURE



				NAME OF EMPLOYEE (TYPED OR PRINTED)

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EXHIBIT A

LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP

________ No inventions or improvements

________ Additional Sheets Attached


DATE:

				(EMPLOYEE’S SIGNATURE



				(EMPLOYEE’S NAME)

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EXHIBIT B

CALIFORNIA LABOR CODE SECTION 2870 INVENTION ON OWN TIME - EXEMPTION FROM AGREEMENT

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

EXHIBIT C

MOSYS, INC. TERMINATION CERTIFICATION

This is to certify and warrant that I do not have in my possession, nor have I failed to return, any media devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to MoSys, Inc. its subsidiaries, affiliates, successors or assigns (together, the “Company”).

I further certify and warrant that I have complied with all the terms of the Company’s Employment, Confidential Information, Invention Assignment and Arbitration Agreement (the “Agreement”) signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree and warrant that, in compliance with the Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information of the Company, including, but not limited to, the Company’s technologies, products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, forecasts, financial information or other subject matter pertaining to any business of the Company or any of its employees, consultants or customers.


DATE:

				(EMPLOYEE’S SIGNATURE



				(EMPLOYEE’S NAME)

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-168358, 333-172828, 333-180119, 333-187187, 333-194563, 333-197989, 333-202735, 333-206209, 333-211273, 333-222739, 333-229728 and 333-234675), Form S-3 (No. 333-258386), and Form S-1 (Nos. 333-222417 and 333-225193) of MoSys, Inc. of our report dated August 31, 2021 relating to the financial statements of Peraso Technologies Inc., which appears in this Form 8-K.

/s/ Weinberg & Company, P.A.

Weinberg & Company, P.A.

Los Angeles, California

December 20, 2021

Exhibit 99.1

MoSys and Peraso Technologies Close Business Combination

Combined Company to Capitalize on Significant Growth Opportunities in 5G

Expected to Commence Trading on Nasdaq under the ticker symbol “PRSO” on December 20, 2021

SAN JOSE, CA. and TORONTO, ON, December 20, 2021 – MoSys, Inc. (NASDAQ: MOSY), a provider of semiconductor solutions that enable fast, intelligent data access for cloud, networking, security and communications systems, and Peraso Technologies Inc., a global leader in the development of 5G mmWave silicon devices, today announced the closing of their previously announced business combination. The combined, publicly traded company will operate under the name Peraso Inc. (“Peraso” or the “Company”), and its shares of common stock are expected to begin trading on the Nasdaq Capital Market on December 20, 2021 under the ticker symbol PRSO.

“This business combination is a significant milestone for both companies and our stockholders, creating a company positioned to capitalize on the significant growth opportunities in 5G, from the edge to the core and into the centralized cloud,” said Ron Glibbery, CEO of Peraso. “Leveraging our leadership positions in 5G millimeter wave and packet classification, the newly combined Peraso is now able to cross-sell into multiple business units across tier-1 networking and telecom customers with both hardware and software solutions targeting high-growth, multi-billion dollar end markets.”

Mr. Glibbery added, “As deployments of 5G networks are implemented globally, the effective use of wireless spectrum will be necessary to support expansion in fiber-like broadband. This exponential growth in data will require millimeter wave wireless access technologies, as well as intelligent packet inspection and accelerated data intelligence, to help facilitate traffic across the network. As a combined company, we can serve the needs of the entire ecosystem and play a more meaningful role in enabling new applications that leverage 5G.”

About Peraso Inc.

Peraso, Inc. (NASDAQ: PRSO) is a pioneer in high performance 5G mmWave wireless technology, offering chipsets, modules, software and IP. Peraso supports a variety of applications, including fixed wireless access, immersive video and factory automation. In addition, Peraso’s solutions for data and telecom networks focus on Accelerating Data Intelligence and Multi-Access Edge Computing, providing end-to-end solutions from the edge to the centralized core and into the cloud. For additional information, please visit www.perasotech.com.

Forward-Looking Statements

This press release 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 are intended to be covered by the “safe harbor” created by those sections. All statements in this release that are not based on historical fact are “forward looking statements.” These statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “strategy,” “goal,” or “planned,” “seeks,” “may,” “might”, “will,” “expects,” “intends,” “believes,” “should,” and similar expressions, or the negative versions thereof, and which also may be identified by their context. All statements that address operating performance, development of the events, objectives or goals, refinement of strategy, the expected synergies, and other financial benefits from the business combination, that are not otherwise historical facts, are forward-looking statements. The Company does not intend to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.

Peraso and MoSys are registered trademarks of Peraso in the U.S., Canada and/or other countries. The MoSys logo is a trademark of Peras0. All other marks mentioned herein are the property of their respective owners.

Investor Relations Contact:

Shelton Group

Leanne K. Sievers | Jeffrey Schreiner

512-243-8976

sheltonir@sheltongroup.com

Peraso Inc. Contact:

Jim Sullivan, CFO

Peraso Inc.

408-418-7500

jsullivan@mosys.com

Exhibit 99.2

Peraso Technologies Inc.

Financial Statements

For years ended December 31, 2020 and 2019

(expressed in US dollars)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Peraso Technologies Inc.

Toronto, Ontario, Canada

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Peraso Technologies Inc. (the “Company”) as of December 31, 2020 and 2019, the related statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and negative cash flows from operating activities and has a negative working capital and a stockholders’ deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board of the United States “(“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Redeemable Convertible Preferred Shares

As described in Note 9 to the financial statements, the Company previously issued shares of Redeemable Convertible Preferred Shares that aggregated to $118,090,923 as of December 31, 2019. The Company accounts for its redeemable convertible preferred shares in accordance with the guidance in Accounting Standards Codification (ASC) Topic 480, Distinguishing Liabilities from Equity. Based on the applicable accounting guidance, preferred shares that are conditionally redeemable is classified as temporary or “mezzanine” equity. Accordingly, the Redeemable Convertible Preferred Shares, which are subject to conditional redemption rights, are presented at redemption value as mezzanine equity outside of the stockholders’ deficit section of the balance sheets. During the year ended December 31, 2020, the conversion terms for a portion of the Redeemable Convertible Preferred Shares was modified to induce conversion into shares of common stock.

We identified the classification of the Redeemable Convertible Preferred Shares as mezzanine equity, and the accounting for the conversion inducement to be a critical audit matter due to the complexity of the relevant accounting guidance and the complexity involved in management judgments involved in the application of that guidance. Auditing the accounting for the modification and eventual conversion of the redeemable convertible preferred shares into common shares involved a high degree of auditor judgement and specialized skills and knowledge were needed.

The primary audit procedures we performed to address this critical audit matter included the following, among others:

•

We read and analyzed the Redeemable Convertible Preferred Shares agreements, including the modified agreements related to the inducement modification, and other relevant documentation.

•

We evaluated the reasonableness of the conclusion made by the Company related to the classification of the redeemable convertible preferred shares, including evaluating whether the presentation was consistent with applicable accounting standards.

•

We evaluated the reasonableness of management’s accounting treatment of the conversion inducement and related modification, including evaluating whether the accounting treatment was consistent with guidance in applicable accounting standards.

Warrant Liability

As discussed in Note 8 to the financial statements, the Company issued warrants in conjunction with the issuance of its redeemable convertible preferred shares and convertible debentures. The Company evaluated the presentation of the warrants based upon guidance in ASC 815, Derivatives and Hedging and concluded that the warrants should be presented and accounted for as warrant liability. Specifically, the Company concluded that the warrants are not considered to be indexed to the Company’s stock as the Company’s functional currency is the US dollar and the exercise price of the warrants are denominated in Canadian dollars. At December 31, 2020 and 2019, the warrant liability totaled $6,705,838 and $1,501,307. The Company utilized a Black-Scholes option pricing model to determine the fair value of the warrant liability, which uses certain assumptions related to expected life of the conversion features, expected volatility based on historical prices of comparable companies, risk-free interest rates, and future dividends.

We identified the presentation and accounting for the warrants as a critical audit matter, because of the significance of the account balances, and due to the complexity in assessing the features of the warrants, and the significant judgments used in determining the fair values of the warrant liability. Auditing the accounting for the valuation of the warrant liability involved increased extent of effort and a high degree of auditor judgment.

The primary audit procedures we performed to address this critical audit matter included the following, among others:

•

We obtained and reviewed the applicable warrant agreements and other relevant documentation.

•

We evaluated the reasonableness of the conclusion made by the Company related to the classification and accounting for the warrant, including whether the conclusion that the warrant was a warrant liability was consistent with applicable accounting standards.

•

We evaluated the appropriateness and reasonableness of the model and significant input assumptions used by the Company to value the warrant liability.

•

We developed valuation estimates, using externally sourced inputs and models, and compared to management’s recorded value and investigated differences. Certain key inputs/assumptions tested by us included volatility, risk-free interest rate, and warrant terms.

Stock-Based Compensation

As discussed in Note 11 to the financial statements, the Company issues stock options as stock-based compensation that is based on fair value measurements. During the year ended December 31, 2020, the Company issued stock options for 18,685,310 shares and modified the terms for another 2,647,200 options. The Company estimated the fair value of stock options granted, and the incremental fair value of modified awards, using the Black-Scholes option pricing which required the Company to make a number of assumptions, of which the most significant are expected stock price volatility and the expected option term.

We identified the Company’s accounting for stock options as a critical audit matter because of the significance of the account balances, and due to the subjectivity of assumptions used to estimate the fair value of stock options granted. Auditing the accounting for the valuation of the stock options involved increased extent of effort and a high degree of auditor judgment.

The primary audit procedures we performed to address this critical audit matter included the following, among others:

•

We obtained and reviewed relevant Board of Directors minutes and grant documents to evaluate the accuracy and completeness of the awards granted.

•

We evaluated the appropriateness of the valuation method used for the stock option grants and whether the method used for determining fair value was applied consistently with the valuation of similar grants in prior periods.

•

We evaluated the significant assumptions used by management to calculate the fair value of stock options granted. Such evaluation included independent calculation of the expected volatility based upon actual historical stock price movements of the comparable company over the period that is at least equal to the expected option term and independent calculation of the stock option term using the simplified method.

•

We developed an independent estimate of the fair value for all the grants during the year and compared our estimate of fair value to the fair value used by management.

We have served as the Company’s auditor since 2021.

/s/ Weinberg & Company

Los Angeles, California

August 31, 2021

Peraso Technologies Inc.

Balance sheets

[Expressed in United States dollars]


	As at
	December 31, 2020			December 31, 2019
ASSETS
Current assets
Cash	$	1,711,886		$	1,903,691
Accounts receivable, net		922,446			393,895
Prepaid expenses and other current assets		963,180			981,857
Tax credits and receivables		1,711,313			1,295,158
Inventories, net		1,273,512			1,107,812

Total current assets		6,582,337			5,682,413
Property and equipment, net		2,621,091			3,332,716
Right-of-use lease asset, net		730,573			956,636
Intangible assets, net		—			153,840
Other non-current assets		52,561			52,561

TOTAL ASSETS	$	9,986,562		$	10,178,166

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	1,542,326		$	1,459,178
Current portion of lease liabilities		224,847			256,098
Current loan facility		580,549			—

Total current liabilities		2,347,722			1,715,276
Long-term liabilities
Convertible debenture		4,321,896			1,632,791
Lease liabilities		532,151			742,058
Warrant liability		6,705,838			1,501,307

Total liabilities		13,907,607			5,591,432
Convertible Class A preferred shares		—			4,457,449
Convertible Class B preferred shares		—			54,830,889
Convertible Class C preferred shares		—			58,802,585

Total preferred shares		—			118,090,923
Commitments and contingencies
STOCKHOLDERS’ DEFICIT
Capital Stock; no par value; unlimited authorized; 115,848,220 and 3,627,415 issued and outstanding		100,548,455			137,919
Additional paid-in capital		1,818,176			(17,581,293	)
Accumulated deficit		(106,287,676	)		(96,060,815	)

Total stockholders’ deficit		(3,921,045	)		(113,504,189	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	9,986,562		$	10,178,166

The accompanying notes are an integral part of these financial statements.

Peraso Technologies Inc.

Statements of operations

[Expressed in United States dollars, except number of shares]


	For the years ended December 31,
	2020			2019
Revenue	$	9,089,823		$	506,000
Cost of revenue		1,748,160			477,432

Gross profit		7,341,663			28,568
Operating expenses
Research and development		7,529,058			10,317,963
General and administrative		6,014,394			4,074,509
Sales and marketing		1,004,872			1,688,052
Amortization and depreciation		938,548			1,649,662

Total operating expenses		15,486,872			17,730,186

Loss from operations		(8,145,209	)		(17,701,618	)
Other income (expense)
Finance expense, net		(2,100,864	)		(16,710	)
Foreign exchange loss		(77,055	)		(7,407	)
Change in fair value of warrant liability		96,267			(243,910	)

Total other income (expense), net		(2,081,652	)		(268,027	)

Loss before income taxes		(10,226,861	)		(17,969,645	)
Income tax expense		—			—

Net loss		(10,226,861	)		(17,969,645	)

Deemed dividend on inducement of conversion of Class C Preferred Shares		(11,133,786	)		—
Accretion of preferred shares presented as dividends		(1,666,010	)		(4,861,566	)
Effect of foreign exchange on preferred shares		7,756,062			(5,256,997	)

Net loss attributable to common stockholders	$	(15,270,595	)	$	(28,088,208	)

Loss per common share—basic and diluted	$	(0.16	)	$	(7.90	)
Weighted average number of common shares outstanding—basic and diluted		93,765,285			3,556,550

The accompanying notes are an integral part of these financial statements.

Peraso Technologies Inc.

Statements of stockholders’ deficit

[Expressed in US dollars]


	Common Shares
	Number of Shares		Amount		Additional Paid in Capital			Deficit			Total
Balance, December 31, 2018		3,499,290	$	128,189	$	(9,362,459	)	$	(78,091,170	)	$	(87,325,440	)
Stock options exercised		128,125		9,730		—			—			9,730
Stock-based compensation		—		—		1,899,729			—			1,899,729
Dividends on preferred shares		—		—		(4,861,566	)		—			(4,861,566	)
Effect of foreign exchange on preferred shares		—		—		(5,256,997	)		—			(5,256,997	)
Net loss for the year		—		—		—			(17,969,645	)		(17,969,645	)

Balance, December 31, 2019		3,627,415	$	137,919	$	(17,581,293	)	$	(96,060,815	)	$	(113,504,189	)
Stock options exercised		111,000		8,422		—			—			8,422
Conversion of Convertible Class A Preferred Shares		2,750,001		1,978,275		2,251,013			—			4,229,288
Conversion of Convertible Class B Preferred Shares		43,956,520		31,621,121		20,481,530			—			52,102,651
Conversion of Convertible Class C Preferred Shares		65,403,284		66,802,718		(11,133,786	)		—			55,668,932
Stock-based compensation		—		—		1,710,660			—			1,710,660
Effect of foreign exchange on preferred shares		—		—		7,756,062			—			7,756,062
Dividends on preferred shares		—		—		(1,666,010	)		—			(1,666,010	)
Net loss for the year		—		—		—			(10,226,861	)		(10,226,861	)

Balance, December 31, 2020		115,848,220	$	100,548,455	$	1,818,176		$	(106,287,676	)	$	(3,921,045	)

The accompanying notes are an integral part of these financial statements.

Peraso Technologies Inc.

Statements of cash flows

[Expressed in US dollars]


	For the years ended December 31,
	2020			2019
Cash flows from operating activities
Net loss	$	(10,226,861	)	$	(17,969,645	)
Adjustment to reconcile net loss to net cash used in operating activities
Stock-based compensation		1,710,662			1,899,729
Amortization and depreciation		1,435,675			1,649,662
Change in fair value of warrants liability		(96,267	)		243,911
Finance cost related to warrants		1,042,856			—
Amortization of right-of-use asset		226,063			215,935
Repayment of lease obligations		(248,143	)		(228,532	)
Accrued interest expense		325,134			3,858
Amortization of convertible debtentures discount		627,124			477
Changes in operating assets and liabilities:
Accounts receivable		(4,028,551	)		49,979
Prepaid expenses and other current assets		(513,404	)		(585,916	)
Tax credits and receivables		(416,155	)		1,004,298
Inventories		(165,700	)		(414,966	)
Accounts payable and accrued liabilities		83,148			64,866

Net cash used in operating activities		(10,244,419	)		(14,066,344	)

Cash flows from investing activities
Purchases of property and equipment		(38,130	)		(1,089,377	)

Net cash used in investing activities		(38,130	)		(1,089,377	)

Cash flows from financing activities
Proceeds on exercise of stock options		8,422			9,730
Net proceeds from loan facility		573,459			—
Net proceeds from convertible debenture		3,451,878			1,674,427
Net proceeds from DIP loans		6,150,000
Net proceeds from Convertible Class C preferred shares issuance		—			7,000,000
Repayment of loans		(100,000	)		(800,000	)

Net cash provided by financing activities		10,083,759			7,884,157

Unrealized loss on foreign currency exchange		6,985			25,805
Net change in cash during the year		(191,805	)		(7,245,759	)
Cash, beginning of the year		1,903,691			9,149,450

Cash, end of the year	$	1,711,886		$	1,903,691

Supplemental disclosure of non-cash financing activities:
Recognition of right-of-use asset and lease liability				$	1,172,571
Reclassification of prepaids to fixed assets	$	532,081
Settlement of accounts receivable through DIP Loans	$	3,500,000
Conversion of DIP loan into convertible debentures	$	2,550,000
Fair value of new warrants issued recognized as debt discount	$	4,257,942		$	34,982
Conversion of preferred shares to common stock	$	112,000,871
Deemed dividend on inducement of conversion of Class C preferred shares	$	(11,133,786	)
Dividends and foreign exchange effect on preferred shares	$	6,090,052		$	(10,118,563	)

The accompanying notes are an integral part of these financial statements.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

The Company and basic presentation

The Company

Peraso Technologies Inc. (the “Company”) is a fabless semiconductor company specializing in the development of mmwave technology, including 60GHz and 5G products. The Company was incorporated on June 5, 2008.

Impact of COVID-19

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19,” has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The extent to which COVID-19 and any other pandemic or public health crisis impacts the Company’s business, affairs, operations, financial condition, liquidity, availability of credit and results of operations will depend on future developments that are highly uncertain and cannot be predicted with any meaningful precision, including new information which may emerge concerning the severity of the COVID-19 virus and the actions required to contain the COVID-19 virus or remedy its impact, among others. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.

Basis of presentation

These financial statements have been prepared by management in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

Going concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

The Company has suffered losses from operations of $10.2 million and $17.9 million for the years ended December 31, 2020 and 2019, respectively, and the Company’s forecasted cash flows from operations are insufficient to cover its operating expenses.

Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, should provide sufficient liquidity to meet the Company’s obligations as they become due for a reasonable period of time, and allow the development of its core business.

•

Raising additional cash through the issuance of convertible notes; and

•

Taking actions to reduce operating costs

The material uncertainties lend significant doubt as to the ability of the Company to meet its obligations as they come due and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern. While the company has been successful in raising financing through debt and equity financing in the past, there can be no assurance that it will be able to do so in the future.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

These financial statements do not reflect the adjustments to the carrying value of assets and liabilities and the reported expenses and balance sheet classification that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations.

Summary of significant accounting policies

Use of estimates

The preparation of these financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Such estimates include the warrants and stock compensation valuation assumptions and the determination of the useful life of property and equipment and intangible assets, all of which are management’s best estimates. Estimates are based on historical experience, where applicable, and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in estimates in future years could be significant. Management believes that the estimates utilized in preparing the financial statements are reasonable; however, actual results could differ from those estimates.

Inventories

The Company values its inventories at the lower of cost, which approximates actual cost on a first-in, first-out basis, or net realizable value. The Company records inventory reserves for estimated obsolescence or unmarketable inventories based upon assumptions about future demand and market conditions. Once a reserve is established, it is maintained until the product to which it relates is sold or otherwise disposed of. If actual market conditions are less favorable than those expected by management, additional adjustment to inventory valuation may be required. Charges for obsolete and slow-moving inventories are recorded based upon an analysis of specific identification of obsolete inventory items and quantification of slow- moving inventory items.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, generally three to six years. Amortization of leasehold improvements is computed on a straight-line basis over the shorter of the lease term or the estimated useful lives of the assets, generally three to six years.

Intangible assets

Intangible assets include the cost of acquired intellectual property. Intangible assets with finite lives are amortized over their estimated useful life and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

As of December 31, 2020, intangible assets were fully amortized.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Impairment of long-lived assets

The Company evaluates the recoverability of long-lived and intangible assets with finite lives whenever events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. An impairment charge is recognized as the difference between the net book value and fair value of such assets at the date of measurement. The measurement of impairment requires management to estimate future cash flows and the fair value of long-lived assets.

No impairment charge was recognized for the years ended December 31, 2020 and 2019.

Revenue recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers and all its related amendments (“ASC 606”).

The Company recognizes revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services by applying the following steps:

•

Identify the contract with a customer;

•

Identify the performance obligations in the contract;

•

Determine the transaction price;

•

Allocate the transaction price to the performance obligations; and

•

Recognize revenue when, or as, the Company satisfies a performance obligation.

Revenue represents the amount the Company expects to receive for products and services in its contracts with customers, net of discounts and sales taxes. The Company derives revenue from the sale of semiconductor chipsets, license fees and royalty fees, and engineering services.

Product revenue

Product revenue is primarily from the sale of semiconductor devices, which is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company’s contracts have a single performance obligation to transfer products. Accordingly, the Company recognizes revenue when title and risk of loss have been transferred to the customer, generally at the time of shipment of products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon a negotiated, formula, list or fixed price. The Company sells its products both directly to customers and through distributors generally under agreements with payment terms typically 30 days or less.

Our contracts with customers are generally for products only, and do not include other performance obligations such as services, extended warranties or other material rights.

The Company may record an estimated allowance, at the time of shipment, for future returns and other charges against revenue consistent with the terms of sale.

License fee and royalty revenue

The Company also generates revenue from licensing its technology. The Company recognizes License fee as revenue at the point of time when the control of the license has been transferred and the Company has no continuing performance obligations to the customer.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Royalty revenues are recognized based upon licensee’s use of the Company’s licensed technology. There were no royalty revenues during the years ended December 31, 2020 and 2019.

Engineering services revenue

Engineering and development contracts with customers generally contain a single performance obligation that is delivered over time. Revenue is recognized using an output method that is consistent with the satisfaction of the performance obligation as a measure of progress.

Contract liabilities—deferred revenue

Receivables are recognized in the period we ship the product or when services were rendered to customer. Payment terms on invoiced amounts are based on contractual terms with each customer. When we receive consideration, or such consideration is unconditionally due, prior to transferring goods or services to the customer under the terms of a sales contract, we record deferred revenue, which represents a contract liability. We recognize deferred revenue as net sales once control of goods and/or services have been transferred to the customer and all revenue recognition criteria have been met and any constraints have been resolved. There were no deferred revenues as of December 31, 2020 and 2019.

Government subsidies

A grant or subsidy that is compensation for expenses or losses already incurred, or for which there are no future related costs, is recognized in the statement of operations in the period in which it becomes receivable.

Starting in 2020, Canadian businesses, non-profit organizations, or charities who have seen a drop in revenue during the COVID-19 pandemic became eligible for a rent and wage subsidy from the government. The Company receives this subsidy on a monthly basis. During the year ended December 31, 2020 the Company recognized payroll subsidies of $1.1 million as a reduction in the associated wage costs and rent subsidies of $90,000 as a reduction of rent expense in operating expenses in the statement of operations.

Cost of revenue

The Company records all costs associated with its product sales in cost of revenue. These costs include the cost of materials, contract manufacturing fees, shipping costs and quality assurance. Cost of revenue also includes indirect costs such as warranty, excess and obsolete inventory charges, general overhead costs and depreciation.

Product warranties

The Company does not offer warranties on our products.

Leases

Effective January 1, 2019, the Company adopted ASC 842, Leases. ASC 842 requires an entity to recognize a right-of-use asset and a lease liability for all leases with terms longer than 12 months. The Company adopted ASC 842 utilizing the modified retrospective transition method. The Company elected the practical expedient afforded in ASC 842 in which the Company did not reassess whether any contracts that existed prior to adoption have or contain leases or the classification of our existing leases. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets and lease liabilities of approximately $1.2 million and did not result in a cumulative-effect adjustment to accumulated deficit.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Under ASC 842, operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at lease commencement date for all significant lease arrangements. A ROU asset and corresponding lease liability is not recorded for leases with an initial term of 12 months or less (short term leases) and the Company recognizes lease expense for these leases as incurred over the lease term.

Research and development

Research and development expenses relate primarily to the development, design, testing of preproduction samples, prototypes and models, compensation, and consulting fees, and are expensed as incurred.

Stock-based compensation

The Company periodically issues stock options to employees and non-employees. The Company accounts for such grants based on ASC 718, Stock compensation, whereby the value of the award is measured on the date of grant and recognized as compensation expense on a straight-line basis over the vesting period. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing (Black Scholes) model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes model.

Fair value measurements

The Company applies ASC 820, Fair Value Measurement, which defines fair value and establishes a framework for measuring fair value and making disclosures about fair value measurements. ASC 820 establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is impacted by a number of factors, including the type of financial instruments and the characteristics specific to them. Financial instruments with readily available quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

There are three levels within the hierarchy that may be used to measure fair value:

Level 1—Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2— Other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3— Significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The Company categorizes its cash as Level 1 fair value measurements. The Company categorizes its warrant liability as Level 3 fair value measurements. The warrant liability are measured at fair value on a recurring basis and are being marked to fair value at each reporting date until they are completely settled or meet the requirements to be accounted for as component of stockholders’ equity. The warrants are valued using the Black-Scholes option pricing model as discussed in Note 8 – Warrants.

The carrying amounts of financial assets and liabilities, such as cash, accounts receivable, and accounts payable approximate their fair values because of their short-term nature. The carrying values of lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Warrant liability

The Company issues detachable warrants with its preferred shares and convertible debentures. The warrants have exercise prices that are denominated in foreign currency (CAD) that differs from the Company’s functional currency (USD) and accordingly are accounted for as liabilities in accordance with ASC 815, Derivatives and hedging. These warrants are initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of these instruments, including whether such instruments should be recorded as liability or as equity, is evaluated at the end of each reporting period.

Preferred shares

The Company issues foreign currency denominated convertible preferred shares with contingent redemption provisions exercisable at the option of the holders. These preferred shares are accounted for as mezzanine equity and presented outside of stockholders’ equity in accordance with ASC 480, Distinguishing liabilities from equity. The preferred shares are initially recognized based on cash proceeds received reduced by issue costs and fair value of foreign currency denominated warrants granted with such preferred shares. The carrying amount of the preferred shares is accreted to their redemption value. Cumulative dividends are recognized and included in the outstanding balance of the preferred shares based upon the Company’s evaluation of probability of redemption of the preferred shares. The carrying amount of the preferred shares are converted into US dollars every reporting period. The dividends, accretion costs, and foreign currency exchange impact for the period are recognized as adjustments to the net loss to arrive at net loss attributable to common stockholders.

Income taxes

The Company follows the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that we consider it is more likely than not that a deferred tax asset will not be realized.

Uncertain tax positions are only recognized after the Company has concluded on the first step that it is more likely than not, based solely on the technical merits, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than not to be realized. The tax position is derecognized when it is no longer more likely than not that the position will be sustained on audit. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provisions, income taxes payable and deferred income taxes in the period in which the facts that give rise to a revision become known.

Tax credits and receivables

The Company is registered for the Canadian federal and provincial goods and services taxes. As such, the Company is obligated to collect from third parties, and is entitled to claim sales taxes paid on its expenses and capital expenditures incurred in Canada.

In addition, the Company is also a part of the Scientific Research and Experimental Development (SR&ED) Program, which uses tax incentives to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada. As a part of the program, the Company may be entitled to a receivable in the form of tax credit or incentive. The Company records refundable tax credits as a receivable when the Company can reasonably estimate the amounts and it is more likely than not, they will be received.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Allowance for doubtful accounts

An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make their required payments. Specifically, the age of the receivables, customers’ payment history, historical write-offs, the creditworthiness of the customer, and current economic trends among other factors are considered. Accounts receivable are written off, and the associated allowance is eliminated, if it is determined that the specific balance is no longer collectible. The allowance is maintained for 100% of all accounts deemed to be uncollectible and, for those receivables not specifically identified as uncollectible, an allowance is maintained for a specific percentage of those receivables based upon the aging of accounts, our historical collection experience and current economic expectations. Allowance for doubtful accounts were $85,405 and $42,889 as of December 31, 2020 and 2019, respectively.

Credit risk

We are exposed to credit risk through our accounts receivable. In order to minimize the risk of loss for accounts receivable, the Company’s extension of credit to customers involves a review by management and third-party insurance on accounts receivable. The majority of the Company’s sales are invoiced with payment terms up to 30 days. The Company’s objective is to minimize its exposure to credit risk from customers in order to prevent losses on financial assets by performing regular monitoring of overdue balances and to provide an allowance for potentially uncollectible accounts receivable.

Foreign currency transactions

The functional currency of the Company is the U.S dollar. All foreign currency transactions are initially measured and recorded in an entity’s functional currency using the exchange rate on the date of the transaction. All monetary assets and liabilities are remeasured at the end of each reporting period using the exchange rate at that date. All non-monetary assets and related expense, depreciation or amortization are not subsequently remeasured and are measured using the historical exchange rate. An average exchange rate may be used to recognize income and expense items earned or incurred evenly over a period. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the statement of operations, except for the gains and losses arising from the conversion of the carrying amount of the foreign currency denominated convertible preferred shares into the functional currency that are presented as adjustment to the net loss to arrive at net loss attributable to common stockholders.

Per share amount

The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes common stock issuable in its calculation. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is antidilutive.

As at December 31, 2020, the potentially dilutive securities consisted of 23,267,135 outstanding stock options (2019 – 10,315,584), 8,281,349 outstanding warrants (2019 – 1,652,854), and convertible preferred shares (2019 – 99,029,148).

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Recently issued accounting pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06 (“ASU 2020-06”), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The ASU also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. With regard to our financial reporting, ASU 2020-06 will be effective January 1, 2024, and early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. We are currently evaluating what effect(s) the adoption of ASU 2020-06 may have on our financial statements, but we do not believe the impact of the ASU will be material to our financial position, results of operations and cash flows. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance for its estimate of expected credit losses and applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. This update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for smaller reporting companies. We are still evaluating the impact of this accounting guidance on our results of operations and financial position.

Inventory

Inventory as of December 31, 2020 and 2019 consist of the following:


	2020 $		2019 $
Raw materials		48,000		—
Work in process		885,006		924,480
Finished goods		340,506		183,332

Total		1,273,512		1,107,812

Inventory reserves as of December 31, 2020 and 2019 were $163,879 and $173,730 respectively.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Property and equipment

Property and equipment as of December 31, 2020 and 2019 consist of the following:


December 31, 2020	Cost		Accumulated depreciation		Net
Computer equipment	$	1,431,913	$	1,345,217	$	86,696
Furniture and fixtures		321,973		286,038		35,935
Licences		701,678		694,986		6,692
Leasehold improvements		237,780		236,178		1,602
Laboratory Equipment		2,593,484		2,274,507		318,977
Production Equipment		5,770490		3,619,301		2,151,189
Work in Progress		20,000				20,000

Total	$	11,077,318	$	8,456,227	$	2,621,091


December 31, 2019	Cost		Accumulated depreciation		Net
Computer equipment	$	1,424,338	$	1,209,424	$	214,914
Furniture and fixtures		321,973		247,489		74,484
Licences		701,678		659,132		42,546
Leasehold improvements		237,780		231,967		5,813
Laboratory Equipment		2,591,434		2,138,180		453,254
Production Equipment		5,229,904		2,688,199		2,541,705
Work in Progress

Total	$	10,507,107	$	7,174,390	$	3,332,716

Depreciation expense amounted to $1,281,836 for the year ended December 31, 2020 (2019: $1,430,824).

The Company’s production equipment is maintained overseas.

Loan facilities

The loan facilities at December 31, 2020 and 2019 consist of the following:


	2020 $		2019 $
Term Loan		—		—
Revolving facility		—		—
Debtor in possession credit agreement		—		—
SRED Financing		580,549		—

Total		580,549		—

In 2016, the Company amended their term loan agreement. The term loan agreement was amended to a term loan facility of $3,000,000, bearing interest at a rate of US prime plus 1.25% per annum, payable on the first calendar day of each month. In 2019, the outstanding balance of $823,038 was repaid in full.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

In 2016, the Company amended their revolving facility agreement. The agreement was amended to a revolving facility of $4,500,000, bearing interest at a rate of prime plus 1.25% per annum, payable on the first calendar day of each month. In 2018, the revolving facility agreement was amended to extend the maturity date of the revolving facility to March 30, 2019. In 2019, no amounts were drawn on the revolving facility and no interest was paid on the revolving loan. The revolving facility was terminated on January 28, 2020.

During the current year, the company entered into a Debtor in possession credit agreement (“DIP loan”) to provide it with financing to fund certain cash requirements during the CCAA proceedings. Proceeds from the DIP loan totalled $6,150,000.

As of December 31, 2020, the full balance of the DIP loan was fully paid/settled as follows:

•

$1 million settled against accounts receivable related to an engineering agreement

•

$2.55 million converted into convertible debentures (Note 7)

•

$100 thousand repaid in cash

•

$2.5M settled against accounts receivable related to licensing manufacturing agreement

On November 30, 2020, the company entered into a Loan agreement (SRED Financing) to raise funds secured by all of the property and undertaking of the Company now owned or hereafter acquired. The proceeds from first draw totalled $587,000 (CDN$750,000) bearing an interest rate of 1.6% per month, compounded monthly (20.98%) net of $20,750 financing fees. The loan will be repaid through proceeds from the company’s Tax credit refund.

Convertible debentures

The convertible debentures at December 31, 2020 and 2019 consist of the following:


	2020			2019
6% Convertible debentures due December 31, 2023	$	8,183,035		$	1,748,035
Accrued Interest		321,903			3,858

Total obligation	$	8,504,938		$	1,751,893
Debt discount		(4,183,042	)		(119,102	)

Net	$	4,321,896		$	1,632,791

Convertible debentures due December 31, 2023

In December 2019, the company entered into convertible debenture agreements with total principal amount of $1,748,035 due on June 30, 2025. In March 2020, the maturity date was amended to December 31, 2023. The convertible debentures bear interest rate of 6% per annum and are secured by the company’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $73,608 were recorded as debt discount. The company also granted to a noteholder warrants to purchase 53,312 common shares of the Company. The fair value of these warrants of $45,971 was initially recorded as liability and debt discount.

During March 2020, the company entered into convertible debenture agreements with total principal amount of $3,885,000 due on December 31, 2023. The convertible debentures bear interest rate of 6% per annum and are secured by the company’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $433,122 were recorded as debt discount. The company also granted to the noteholders warrants to purchase 2,160,215 common shares of the Company. The fair value of these warrants of $1,707,943 was initially recorded as liability and debt discount.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

During October 2020, the company settled a portion of its DIP loan amounting to $2,550,000 through issuance of convertible debentures that will mature on December 31, 2023 (Note 6). The convertible debentures bear interest rate of 6% per annum and are secured by the company’s assets. The company also granted to the noteholders warrants to purchase 4,468,280 common shares of the Company. The fair value of these warrants of $3,592,855 was initially recorded as liability and debt discount up to the face value of the convertible debt, and a finance expense of $1,042,856 recorded on the statement of operations for the remaining portion.

In the event of a liquidation prior to conversion or repayment, the Company shall pay an amount to the holder equal to 3 times the outstanding principal and accrued interest.

The recorded debt discount is amortized to interest expense using the effective interest rate method over the terms of the related convertible debentures. During the years ended December 31, 2020 and 2019, amortization of the debt discount amounted to $627,125 and $476.

For the years ended December 31, 2020 and 2019, $318,045 and $3,858, respectively, in interest expense was recognized and included in the outstanding balance of accrued interest at December 31, 2020 and 2019 respectively.

Warrant liability

Warrants outstanding at December 31, 2020 and their respective exercise price and expiration dates, are as follows:


Year issued	Number of warrants issued		Exercise price		Expiry date
			$
2014		594,000	CDN$	1.00		December 31, 2025
2015		90,000	CDN$	1.00		August 31, 2022
2016		417,850	CDN$	1.479		December 31, 2025
2017		161,007	CDN$	1.479		December 31, 2022
2017		336,685	CDN$	1.479		December 31, 2025
2019		53,312	CDN$	1.479		December 31, 2025
2020		2,160,215	CDN$	0.15		December 31, 2025
2020		4,468,280	CDN$	0.15		December 31, 2023

2020 Total		8,281,349

Exercise prices in USD $0.79, $1.16, and $0.12 as of December 31, 2020.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Warrants outstanding at December 31, 2019 and their respective exercise price and expiration dates, are as follows:


Year issued	Number of warrants issued		Exercise price		Expiry date
			$
2014		594,000	CDN$	1.00		December 31, 2025
2015		90,000	CDN$	1.00		August 31, 2022
2016		417,850	CDN$	1.479		December 31, 2025
2017		161,007	CDN$	1.479		December 31, 2022
2017		336,685	CDN$	1.479		December 31, 2025
2019		53,312	CDN$	1.479		December 31, 2025

2019 Total		1,652,854

Exercise prices in USD $0.77 and $1.14 as of December 31, 2019.

Warrant activity and the related changes in the estimated fair values during the years ended December 31, 2020 and 2019 are as follows:


	Number of warrants on common shares #		Amount $
Balance – December 31, 2018		1,599,542		1,211,425
Issued in the year		53,312		45,971
Change in fair value of warrants		—		243,911

Balance – December 31, 2019		1,652,854		1,501,307
Issued in the year		6,628,495		5,300,798
Change in fair value of warrants		—		(96,267	)

Balance – December 31, 2020		8,281,349		6,705,838

The fair value of the warrant liability is estimated using the Black-Scholes option-pricing model. The Company is a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies within the semiconductor industry with characteristics similar to the Company. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero, based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The Company granted warrants with exercise price of CDN$0.15 ($0.12 USD) to purchase 6,628,495 common shares of the Company in 2020 (2019: granted 53,312 warrants with exercise price of CDN$1.48 ($1.14 USD)) to certain holders of convertible debentures (Note 7). The total fair values of these warrants at grant date amounted to $5.3 million in 2020 (2019: $45,971). The fair values were determined using black-scholes model with the following assumptions: expected term based on the contractual term of 3.2—5 years (2019: 5 years), risk-free interest rate of 0.37%-0.38% (2019: 1.69%) based on a comparable US Treasury Bond, expected volatility of 104.37%, (2019: 104.37%) and expected dividend of zero.

The fair values of the outstanding warrants at December 31, 2020 and 2019 were calculated based on the following assumptions used in the Black-Scholes model: expected term based on the remaining contractual term of 1.92-5.25 years (2019: 2.67- 6.01 years), risk-free interest rate of 0.36% (2019: 1.69%) based on a comparable US Treasury Bond, expected volatility of 104.37%, (2019: 104.37%) and expected dividend of zero.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Convertible preferred shares

The following tables summarize the movement in preferred shares for the year-ended December 31, 2019, and December 31, 2020.


	Class A preferred shares				Class B preferred shares				Class C preferred shares				Total
	Number of shares		Amount		Number of shares		Amount		Number of shares		Amount		Amount
Balance Beginning of year 2019		2,750,001	$	3,929,405		43,956,520	$	48,222,750		46,028,780	$	48,825,480	$	100,977,635
Shares issued (net of financing costs)		—		—		—		—		6,293,847		7,000,000		7,000,000
Dividends accrued		—		330,181		—		4,067,664		—		—		4,397,845
Amortization of issuance costs and warrants		—		—		—		112,258		—		351,462		463,720
Foreign exchange		—		197,862		—		2,428,217		—		2,625,643		5,251,723

Balance – End of year 2019		2,750,001	$	4,457,449		43,956,520	$	54,830,889		52,322,627	$	58,802,585	$	118,090,923


	Class A preferred shares						Class B preferred shares						Class C preferred shares						Total
	Number of shares			Amount			Number of shares			Amount			Number of shares			Amount			Amount
Balance – Beginning of year 2020		2,750,001		$	4,457,449			43,956,520		$	54,830,889			52,322,627		$	58,802,585		$	118,090,923
Dividends accrued					64,600						795,834									860,434
Amortization of issuance costs and warrants											77,151						728,425			805,567
Foreign exchange impact		—			(292,760	)		—			(3,601,223	)		—			(3,862,079	)		(7,756,062	)
Preferred shares converted into ordinary shares		(2,750,001	)		(4,229,289	)		(43,956,520	)		(52,102,651	)		(52,322,627	)		(55,668,932	)		(112,000,872	)

Balance – End of year 2020		—			—			—			—			—			—			—

Authorized, Unlimited, Convertible, Redeemable Class A, Class B and Class C preferred shares

The holders of the convertible Class A, Class B and Class C preferred shares have the following rights and preferences:

•

Voting

Each convertible Class A, Class B and Class C preferred share has voting rights equal to an equivalent number of common shares and votes together as one class with the common shares.

•

Conversion

Each Class A, Class B and Class C preferred share is convertible, at the option of the holder, into one common share. The Class A, Class B and Class C preferred shares are automatically convertible into common shares in the event of: (i) the closing of a public offering; (ii) the affirmative vote or written consent by the majority of the preferred shareholders; and (iii) the optional conversion into common shares of at least two-thirds of the aggregate number of preferred shares.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

In March 2020, the company filed an articles of amendment, wherein the ratio for the conversion of the Preferred Class C shares into common shares was changed from 1:1 to 1:1.25 (Note 10).

•

Redemption

The convertible Class A preferred shares can be redeemed on or after June 1, 2021, subject to agreement by two-thirds of the holders of the Company’s Class A preferred shares. The price would be the original issue price of CDN$1 per share plus all accrued dividends.

The Class B preferred shares can be redeemed on or after June 1, 2021 subject to agreement by a majority of the holders of the Company’s Class B preferred shares. The price would be the original issue price of CDN$1 ($0.79 USD) per share plus all accrued dividends.

The Class C preferred shares can be redeemed on or after June 1, 2021 subject to agreement by a majority of the holders of the Company’s Class C preferred shares. The price would be the original issue price of CDN$1.479 ($1.16 USD) per share.

•

Dividends

Class A and Class B preferred shares will accrue an annual compounding dividend of 8% per year. The dividend will be paid at the earlier of a liquidation event (as defined in the articles of incorporation of the Company) or the redemption of the preferred shares. Other than those two circumstances no accrued dividends can be declared or become payable. Upon conversion all rights of holders of preferred shares cease including rights to dividends.

The total dividend accrued since the issuance of Class A and Class B preferred shares of $22,732,543 was recognized as additional paid in capital upon conversion of preferred shares into common shares.

•

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, the holders of each convertible Class A and Class B preferred share would receive CDN$1 ($0.79 USD) per share plus all accrued dividends. Class C preferred shareholders would receive CDN$1.4790 ($1.16 USD) and no accrued dividends. Thereafter, any assets remaining following distribution to the holders of the convertible Class A, Class B and Class C preferred shares will be distributed rateably among the holders of the convertible Class A, Class B and Class C preferred shares and common shares, provided that the maximum amount receivable for each convertible Class A and Class B preferred share is CDN$5 ($3.93 USD) and CDN$4.44 ($3.49 USD) for Class C preferred shares.

On March 13, 2020, all of the outstanding preferred shares were converted into common shares. The carrying amount of the preferred shares were reclassified into common stock and the accumulated dividends were reclassified into additional paid-in capital (Note 10).

10.

Capital stock

As of December 31, 2020, the Company is authorized to issue an unlimited number of common shares.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

On March 13, 2020, the Company issued 2,750,001 common shares upon conversion of all outstanding Class A preferred shares amounting to $1,978,275 and 43,956,520 common shares upon conversion of all outstanding Class B preferred shares amounting to $31,621,121. The Class A and B preferred shares were converted into common shares based on the original conversion price of CDN$1.00 ($0.72 USD). The outstanding accumulated dividends of $22,732,543 were reclassified into additional paid-in capital.

On March 13, 2020, the Company also issued 65,403,284 common shares amounting to $66,802,718 upon conversion of all outstanding Class C preferred shares based on the amended conversion price of CDN$1.18 ($0.85 USD). As a conversion inducement, the Company amended the ratio for the conversion of the Class C preferred shares into common shares from 1:1 to 1:1.25. The company determined that the additional common shares issuable arising from such modification totaled 13,080,657 with fair value of $11,133,786 and recognized such amount as deemed dividend.

11.

Stock-based compensation

In 2009, the Company adopted the 2009 Share Option Plan (the plan). Under the plan, officers, employees, directors, consultants, and special advisers may be granted stock options to purchase shares of the Company’s common stock; 12,896,147 shares of common stock have been reserved for issuance. Stock options generally vest over terms of four years and expire in ten years.

On September 16, 2020, Board of Directors approved the increase in number of options shares (as defined in Stock option plan) from 10% of outstanding issue to 23,169,644 or 20% of outstanding issue of 115,848,220. As of December 31, 2020, the Company had granted 97,491 more shares than were authorized for grant, however in the first quarter of 2021 this was corrected due to additional forfeitures.

On September 17, 2020, Board of Directors approved the cancellation of stock options totaling 2.6 million with exercise price of CDN$0.60 ($0.47 USD) and original vesting term of 4 years and replaced such awards with option grants that have exercise price of CDN$0.15 ($0.12 USD) and vesting period of one year. The replacement of the option grants was accounted for as modification in accordance with the provisions of ASC 718. The company determined that the incremental fair value of the replacement awards amounted to approximately $530,000 using black-scholes option pricing model. At replacement date, the total unrecognized compensation cost for the replacement awards was determined to be $952,000 and is amortized over the one year vesting term.

Additionally, the Board also approved the grant of stock options to employees to purchase a total of 18.7 million common shares of the Company. The options have an exercise price of CDN$0.15 ($0.12 USD) per share, expire in ten years, and have vesting period of 4 years. The total fair value of these options at grant date was approximately $15.8 million.

In 2019, the Board of Directors approved the grant of stock options to employees to purchase a total of 434,000 common shares of the Company. The options have an exercise price of CDN$0.60 ($0.47 USD) per share, expire in ten years, and have vesting period of 4 years. The total fair value of these options at grant date was approximately $426,000.

The fair value of the stock option is estimated at grant date using the Black-Scholes option-pricing model. The Company is a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of publicly traded set of peer companies within the semiconductor industry with characteristics similar to the Company. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero, based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

The assumptions used in the Black-Scholes option pricing model were as follows: average risk-free interest rate of 0.46% (2019 – 1.90%); expected average volatility of 104.37% (2019 – 104.37%); expected stock option life of 6.25 years for those options vesting in 4 years and 5.5 years for those options vesting in 1 year (2019 – 6.25 years for options vesting in 4 years); exercise price of CDN$0.15 ($0.12 USD) (2019 – CDN$0.60 ($0.46 USD)); and an underlying stock price of CDN$1.18 ($0.93 USD) (2019 – CDN$1.48 ($1.14 USD)).

A summary of stock option activity under the plan is as follows:


	Number of stock options #			Weighted average exercise price per stock option $
Balance – December 31, 2018		10,537,650			0.37
Granted		434,000			0.47
Forfeited and returned to the plan		(527,941	)		0.35
Exercised		(128,125	)		0.08

Balance – December 31, 2019		10,315,584			0.38
Authorized
Granted		18,685,310			0.12
Forfeited and returned to the plan		(5,622,759	)		0.31
Exercised		(111,000	)		0.08

Balance – December 31, 2020		23,267,135			0.08

Significant exercise price ranges of options outstanding, related weighted average exercise prices and contractual life information at the end of 2020 were as follows:


Exercise price range $	Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price $		Number exercisable
0.08		1,914,000		3.66		0.08		1,914,000
0.12		21,332,510		9.29		0.12		—
0.47		20,625		6.62		0.47		—

0.12		23,267,135		8.83		0.08		1,914,000

Significant exercise price ranges of options outstanding, related weighted average exercise prices and contractual life information at the end of 2019 were as follows:


Exercise price range $	Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price $		Number exercisable
0.08		2,444,000		4.37		0.08		2,444,000
0.46		7,871,584		7.69		0.46		171,033

0.12		10,315,584		6.90		0.10		2,615,033

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

The Company recorded a total stock-based compensation expense of $1,710,660 (2019 – $1,899,729).

As of December 31, 2020, there was $15.3 million of total unrecognized compensation expense related to non-vested stock options that are expected to be recognized over a weighted average period of 3.7 years. For vested and exercisable options, outstanding shares totalled 1,914,000. These options had a weighted-average exercise price of $0.08 per share and a weighted-average remaining contractual term of 3.7 years at December 31, 2020.

12.

Leases

Operating lease agreements

The Company has two operating leases with third parties for office space in Canada. These leases expire on September 14, 2021 and December 31, 2023. Leases with an initial term of 12 months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company did not combine lease and non-lease components.

The following table provides the details of right-of-use assets and lease liabilities as of:


	December 31, 2020		December 31, 2019
Right-of-use asset	$	730,573	$	956,636
Lease liability	$	756,998	$	998,156

The following provides details of the Company’s lease payments during the years ended:


	December 31, 2020		December 31, 2019
Lease payments	$	248,183	$	228,532

The following table provides details of future lease payments for operating leases as of December 31, 2020 (in thousands):


	December 31, 2020
Annual Fiscal Years
2021	$	277,211
2022	$	279,288
2023	$	299,237

Total lease payments	$	855,736
Less: Interest	$	98,738

Present value of lease liabilities	$	756,998

13.

Contingencies and commitments

In the ordinary course of business and from time to time, the Company is involved in various claims related to software, intellectual property rights, commercial, employment and other claims. The Company recognizes a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in assessing both the likelihood of an unfavourable outcome and whether the amount of loss, if any, can be reasonably estimated.

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

On June 3, 2020, Peraso Technologies Inc. (“Peraso”) applied for and obtained an order under the Companies’ Creditors Arrangement Act (the “CCAA”), providing certain relief. Pursuant to the Initial Order issued by the Ontario Superior Court of Justice (Commercial List), Ernst & Young Inc. was appointed as the Monitor of Peraso. In addition, the Monitor, in its capacity as Foreign Representative, filed a voluntary petition in the United States under Chapter 15 of the U.S. Bankruptcy Code, seeking recognition of the CCAA proceeding.

On October 14, 2020, the Court approved a settlement agreement (the “Settlement Agreement”) as between Ubiquiti Inc. and Peraso. On October 22, 2020, following the satisfaction of certain conditions precedent, the Settlement Agreement (including all agreements incorporated as schedules thereto) became fully effective. The terms of the settlement agreement are subject to confidentiality.

On October 28, 2020, the Court granted an order authorizing the termination of Peraso’s CCAA proceedings upon the completion of certain defined steps. On November 2, 2020, Peraso provided written notice to the Monitor that these steps had been completed and, as contemplated in the CCAA Termination Order dated October 28, 2020 (the “CCAA Termination Order”), the Monitor served a Monitor’s Certificate on the service list that had the effect of, inter alia: terminating the CCAA proceedings and the Stay Period referred to in the Initial Order; discharging Ernst & Young Inc. from its duties as the Monitor; releasing certain claims in favour of the Monitor and its counsel, with certain exceptions; and terminating the Administration Charge, the Directors’ Charge, the DIP Lenders’ Charge, the Second DIP Lenders’ Charge, and the Third DIP Lenders’ Charge (as such terms are defined in the CCAA Termination Order).

Notwithstanding the discharge of Ernst & Young Inc. as Monitor:

Ernst & Young Inc. will remain Monitor and have the authority to carry out, complete, or address any matters in its role as Monitor that are ancillary or incidental to these CCAA proceedings, including any matter in respect of the Chapter 15 Proceedings (as defined in the CCAA Termination Order);

Ernst & Young Inc. and its counsel will continue to have the benefit of any of the rights, approvals, releases and protections in favour of the Monitor at law or pursuant to the CCAA, the Initial Order, and all other Orders made in these CCAA proceedings;

On December 1, 2020 the United States Bankruptcy Court for the Southern District of New York issued an Order that: (i) recognized and gave full force and effect in the United States to the Court’s order approving the Settlement Agreement; and (ii) terminated the Chapter 15 Proceedings.

14.

Disaggregated revenue, Concentration of Credit Risk and Significant Customers

The Company operates in one business segment and uses one measurement of profitability for its business.

The following table represents disaggregation of revenue for the year ended December 31, 2020 and December 31, 2019:


	2020 $		2019 $
Product sales		1,539,823		506,000
License fees		5,000,000		—
Engineering services		2,550,000		—

		9,089,823		506,000

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

Revenue attributed to the United States and to all foreign countries is based on the geographical location of the customer. The Company recognized revenue from chipset sales and licensing of its chipsets to customers in the following geographical locations:


	2020 $		2019 $
North America		7,726,756		211,587
Taiwan		1,350,975		229,722
Rest of the world		12,092		64,691

		9,089,823		506,000

Customers who accounted for at least 10% of total revenue were:


Customer A	55	%	*
Customer B	27	%	*
Customer C	12	%	*
Customer D	*		44	%
Customer E	*		33	%

*	Represents percentage less than 10%

15.

Income taxes

A reconciliation from the statutory income tax rate and the Company’s effective income tax rate, as computed on loss before taxes, is as follows:


	2020 $			2019 $
Statutory income tax rate		21	%		21	%
Loss before income taxes	$	(10,226,861	)	$	(17,969,645	)
Statutory rate		21	%		21	%

Expected recovery		(2,147,641	)		(3,773,625	)
Permanent differences	$	181,931		$	571,818
Changes in estimates	$	3,723		$	42,619
Change in deferred tax valuation allowance	$	1,961,987		$	3,159,188

Income tax expense		—			—

Current		—			—
Deferred		—			—

Peraso Technologies Inc.

Notes to Financial Statements

For years ended December 31, 2020 and 2019

The tax effect of temporary differences between US GAAP accounting and income tax accounting creating deferred income tax assets and liabilities were as follows:


	2020 $			2019 $
Deferred tax assets
Canada net operating loss carry forward		18,705,988			16,915,739
SRED Pool		7,632,441			6,937,036
Financing		43,220			103,325
Fixed Assets		287,903			185,173

Deferred tax assets		26,669,552			24,141,183

Deferred tax liabilities
Leases		(7,003	)		(11,003	)

Deferred tax liabilities		(7,003	)		(11,003	)

Deferred tax assets, net		26,662,549			24,130,180
Valuation allowance		(26,662,549	)		(24,130,180	)

Deferred tax assets, net		—			—

Assessment of the amount of value assigned to the Company’s deferred tax assets under the applicable accounting rules is judgmental. The Company is required to consider all available positive and negative evidence in evaluating the likelihood that the Company will be able to realize the benefit of its deferred tax assets in the future. Such evidence includes scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and the results of recent operations. Since this evaluation requires consideration of events that may occur some years into the future, there is an element of judgment involved. Realization of the Company’s deferred tax assets is dependent on generating sufficient taxable income in future periods. Management does not believe that it is more likely than not that future taxable income will be sufficient to allow it to recover substantially all of the value assigned to its deferred tax assets. Accordingly, the Company has provided for a valuation allowance of the Company’s deferred tax asset.

The Company has net operating loss carry forwards of 2020 - $70,588,635 (2019 - $63,832,978) for tax purposes.

16.

Subsequent events

The Company evaluates events or transactions that occur after the balance sheet date through to the date which the financial statements are issued, for potential recognition or disclosure in its financial statements in accordance with ASC 855, Subsequent Events.

On February 5, 2021 and March 5, 2021 the Company raised additional funds from the second and third draw from the SRED Financing amounting to $275,065 (CDN$350,000) and $276,290 (CDN$350,000) respectively net of financing fees of $14,256. The interest rate is 1.6% per month, compounded monthly. The loan is secured by all of the property and undertaking of the Company now owned or hereafter acquired.

On April 23, 2021, the Company raised $5.90 million through the issuance of convertible debentures with a maturity date of December 31, 2023. The convertible debentures bear interest rate of 6% per annum and are secured by the company’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $353,959 were recorded as debt discount. Upon the closing of an Equity Financing after September 30, 2020, all the outstanding principal and accrued interest shall convert at a price equal to the lower of CDN$0.15 (USD$0.12) and 80% of the per share price paid by the investors in such financing.

On July 21, 2021, the Company agreed to extend the operating lease for office space in Canada, which was to expire on September 14, 2021. The lease has been extended to September 30, 2022.

Exhibit 99.3

Peraso Technologies Inc.

Condensed Financial Statements

For the three and nine months ended

September 30, 2021 and 2020 (unaudited)

(expressed in US dollars)

Peraso Technologies Inc.

Condensed Balance Sheets

[Expressed in United States dollars]


	As at
	September 30, 2021			December 31, 2020
	(Unaudited)
ASSETS
Current assets
Cash	$	1,156,851		$	1,711,886
Accounts receivable, net		938,364			922,446
Prepaid expenses and other current assets		743,051			963,180
Tax credits and receivables		1,052,180			1,711,313
Inventories, net		2,029,752			1,273,512

Total current assets		5,920,198			6,582,337
Property and equipment, net		1,877,536			2,621,091
Right-of-use lease asset, net		572,690			730,573
Intangible assets, net		92,208			—
Other non-current asset		60,410			52,561

TOTAL ASSETS	$	8,523,042		$	9,986,562

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	2,522,982		$	1,542,326
Current portion of lease liabilities		259,170			224,847
Current loan facility		734,082			580,549

Total current liabilities		3,516,234			2,347,722
Long-term liabilities
Convertible debentures		9,295,583			4,321,896
Lease liabilities		349,685			532,151
Warrant liability		9,197,521			6,705,838

Total liabilities		22,359,023			13,907,607

STOCKHOLDERS’ DEFICIT
Capital Stock; no par value; unlimited authorized; 116,223,216 and 115,848,220 issued and outstanding		100,579,143			100,548,455
Additional paid-in capital		5,279,492			1,818,176
Accumulated deficit		(119,694,616	)		(106,287,676	)

Total stockholders’ deficit		(13,835,981	)		(3,921,045	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	8,523,042		$	9,986,562

The accompanying notes are an integral part of these condensed financial statements.

Peraso Technologies Inc.

Condensed Statements of Operations

[Expressed in United States dollars, except number of shares]

(Unaudited)


	For the three months ended September 30,						For the nine months ended September 30,
	2021			2020			2021			2020
Revenue	$	2,016,920		$	798,748		$	3,815,612		$	3,191,261
Cost of revenue		919,013			163,106			1,972,630			1,113,614

Gross profit		1,097,907			635,642			1,842,982			2,077,647

Operating expenses
Research and development		2,547,078			1,799,426			7,911,586			5,912,535
General and administrative		1,453,011			2,207,109			3,977,913			4,691,135
Sales and marketing		266,810			194,514			790,853			817,479
Amortization and depreciation		175,349			236,707			546,778			759,870

Total operating expenses		4,442,248			4,437,756			13,227,130			12,181,019

Loss from operations		(3,344,341	)		(3,802,114	)		(11,384,148	)		(10,103,372	)
Other income (expense)
Finance expense, net		(870,212	)		(250,402	)		(2,170,059	)		(570,419	)
Foreign exchange		69,247			(87,157	)		34,530			(24,911	)
Change in fair value of warrant liability		323,903			(29,954	)		112,737			359,713

Total other expense, net		(477,062	)		(367,513	)		(2,022,792	)		(235,617	)

Net loss		(3,821,403	)		(4,169,627	)		(13,406,940	)		(10,338,989	)

Deemed dividend on inducement of conversion of Class C Preferred Shares		—			—			—			(11,133,786	)
Accretion of preferred shares presented as dividends		—			—			—			(1,666,010	)
Effect of foreign exchange on preferred shares		—			—			—			7,756,062

Net loss attributable to common stockholders	$	(3,821,403	)	$	(4,169,627	)	$	(13,406,940	)	$	(15,382,723	)

Loss per common share - basic and diluted	$	(0.03)		$	(0.04)		$	(0.12)		$	(0.18)
Weighted average number of common shares outstanding - basic and diluted		116,216,368			115,803,220			116,045,837			86,339,902

The accompanying notes are an integral part of these condensed financial statements.

Peraso Technologies Inc.

Condensed Statements of Stockholders’ Deficit

Quarterly Presentation

[Expressed in US dollars]

(Unaudited)


	Common Shares
	Number of Shares			Amount		Additional Paid in Capital		Deficit			Total
Balance, December 31, 2020		115,848,220		$	100,548,455	$	1,818,176	$	(106,287,676	)	$	(3,921,045)
Stock-based compensation		—			—		1,176,917		—			1,176,917
Net loss for the period		—			—		—		(4,156,801	)		(4,156,801	)

Balance, March 31, 2021		115,848,220			100,548,455		2,995,093		(110,444,477	)		(6,900,929	)
Stock options exercised		365,000			29,895		—		—			29,895
Stock-based compensation		—			—		1,136,828		—			1,136,828
Fractional share adjustment		(4	)		—		—		—			—
Net loss for the period		—			—		—		(5,428,736	)		(5,428,736	)

Balance, June 30, 2021		116,213,216			100,578,350		4,131,921		(115,873,213	)		(11,162,942	)
Stock options exercised		10,000			793		—		—			793
Stock-based compensation		—			—		1,147,571		—			1,147,571
Net loss for the period		—			—		—		(3,821,403	)		(3,821,403	)

Balance, September 30, 2021		116,223,216		$	100,579,143	$	5,279,492	$	(119,694,616	)	$	(13,835,981)


	Common Shares
	Number of Shares		Amount		Additional Paid in Capital			Deficit			Total
Balance, December 31, 2019		3,627,415	$	137,919	$	(17,581,293)		$	(96,060,815)		$	(113,504,189	)
Stock options exercised		66,000		5,009		—			—			5,009
Conversion of Convertible Class A Preferred Shares		2,750,001		1,978,275		2,251,013			—			4,229,288
Conversion of Convertible Class B Preferred Shares		43,956,520		31,621,121		20,481,530			—			52,102,651
Conversion of Convertible Class C Preferred Shares		65,403,284		66,802,718		(11,133,786	)		—			55,668,932
Stock-based compensation		—		—		202,441			—			202,441
Dividends		—		—		(1,666,010	)		—			(1,666,010	)
Effect of foreign exchange on preferred shares		—		—		7,756,060			—			7,756,060
Net loss for the period		—		—		—			(1,968,516	)		(1,968,516	)

Balance, March 31, 2020		115,803,220		100,545,042		309,955			(98,029,331	)		2,825,666
Stock-based compensation		—		—		80,966			—			80,966
Net loss for the period		—		—		—			(4,200,846	)		(4,200,846	)

Balance, June 30, 2020		115,803,220		100,545,042		390,921			(102,230,177	)		(1,294,214	)
Stock-based compensation		—		—		203,156			—			203,156
Net loss for the period		—		—		—			(4,169,627	)		(4,169,627	)

Balance, September 30, 2020		115,803,220	$	100,545,042	$	594,077		$	(106,399,804	)	$	(5,260,685)

The accompanying notes are an integral part of these condensed financial statements.

Peraso Technologies Inc.

Condensed Statements of Stockholders’ Deficit

Year-to-date Presentation

[Expressed in US dollars]

(Unaudited)


	Common Shares
	Number of Shares			Amount		Additional Paid in Capital		Deficit			Total
Balance, December 31, 2020		115,848,220		$	100,548,455	$	1,818,176	$	(106,287,676	)	$	(3,921,045	)
Stock options exercised		375,000			30,688		—		—			30,688
Stock-based compensation		—			—		3,461,316		—			3,461,316
Fractional share adjustment		(4	)		—		—		—			—
Net loss for the period		—			—		—		(13,406,940	)		(13,406,940	)

Balance, September 30, 2021		116,223,216		$	100,579,143	$	5,279,492	$	(119,694,616	)	$	(13,835,981	)


	Common Shares
	Number of Shares		Amount		Additional Paid in Capital			Deficit			Total
Balance, December 31, 2019		3,627,415	$	137,919	$	(17,581,293	)	$	(96,060,815	)	$	(113,504,189	)
Stock options exercised		66,000		5,009		—			—			5,009
Stock-based compensation		—		—		486,563			—			486,563
Conversion of Convertible Class A Preferred Shares		2,750,001		1,978,275		2,251,013			—			4,229,288
Conversion of Convertible Class B Preferred Shares		43,956,520		31,621,121		20,481,530			—			52,102,651
Conversion of Convertible Class C Preferred Shares		65,403,284		66,802,718		(11,133,786	)		—			55,668,932
Effect of foreign exchange on preferred shares		—		—		7,756,060			—			7,756,060
Dividends		—		—		(1,666,010	)		—			(1,666,010	)
Net loss for the period		—		—		—			(10,338,989	)		(10,338,989	)

Balance, September 30, 2020		115,803,220	$	100,545,042	$	594,077		$	(106,399,804	)	$	(5,260,685	)

The accompanying notes are an integral part of these condensed financial statements.

Peraso Technologies Inc.

Condensed Statements of Cash Flows

[Expressed in US dollars]

(Unaudited)


	For the nine months ended September 30,
	2021			2020
Cash flows from operating activities
Net loss	$	(13,406,940)		$	(10,338,989)
Adjustment to reconcile net loss to net cash used in operating activities
Stock-based compensation		3,461,316			486,563
Amortization and depreciation		783,001			1,170,961
Change in fair value of warrants liability		(112,737	)		(359,713	)
Amortization of right-of-use asset		181,685			167,618
Repayment of lease obligations		(176,713	)		(182,444	)
Accrued interest expense		660,976			207,169
Amortization of debt discount		1,539,615			345,370
Disposal of property and equipment		20,000			—
Changes in operating assets and liabilities:
Accounts receivable		(15,918	)		(1,336,828	)
Prepaid expenses and other current assets		220,129			(49,779	)
Tax credits and receivables		(434,100	)		152,709
Inventories		(756,240	)		(59,178	)
Other non-current assets		(7,849	)		—
Accounts payable and accrued liabilities		980,656			19,625

Net cash used in operating activities		(7,063,119	)		(9,776,916	)

Cash flows from investing activities
Purchases of property and equipment		(56,655	)		(27,575	)
Purchases of intangible assets		(95,000	)		—

Net cash used in investing activities		(151,655	)		(27,575	)

Cash flows from financing activities
Proceeds on exercise of stock options		30,688			5,009
Net proceeds from loan facility		1,262,315			—
Net proceeds from convertible debenture		5,545,350			3,451,879
Net proceeds from DIP loans		—			6,150,000
Repayment of loan facility		(184,555	)		—

Net cash provided by financing activities		6,653,798			9,606,888

Unrealized loss (gain) on foreign currency exchange		5,941			(28,809	)
Net change in cash during the period		(555,035	)		(226,412	)
Cash, beginning of the period		1,711,886			1,903,691

Cash, end of the period	$	1,156,851		$	1,677,279

The accompanying notes are an integral part of these condensed financial statements.

Peraso Technologies Inc.


Supplemental disclosure of non-cash financing activities:
Conversion of preferred shares to common stock		—	$	112,000,871
Deemed dividend on inducement of conversion of Class C preferred shares		—	$	(11,133,786)
Dividends and foreign exchange effect on preferred shares		—	$	6,090,050
Fair value of new warrants issued recognized as debt discount	$	2,604,419		—
Settlement of loan facility against tax receivables	$	(1,277,788)		—

The accompanying notes are an integral part of these condensed financial statements.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

1.	The Company and basic presentation

The Company

Impact of COVID-19

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19,” has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The extent to which COVID-19 and any other pandemic or public health crisis impacts the Company’s business, affairs, operations, financial condition, liquidity, availability of credit and results of operations will depend on future developments that are highly uncertain and cannot be predicted with any meaningful precision, including new information which may emerge concerning the severity of the COVID-19 virus and the actions required to contain the COVID 19 virus or remedy its impact, among others. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.

Basis of presentation

The condensed financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. These condensed financial statements should be read in conjunction with the audited financial statements for the fiscal year ended December 31, 2020 and other information elsewhere in this filing.

The condensed financial statements of the Company as of September 30, 2021, and for the three and nine months ended September 30, 2021 and 2020, are unaudited. In the opinion of management of the Company, all adjustments, including normal recurring accruals, have been made that are necessary to present fairly the financial position of the Company as of September 30, 2021, and the results of its operations for the three and nine months ended September 30, 2021 and 2020, and its cash flows for the nine months ended September 30, 2021 and 2020. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for a full fiscal year. The condensed balance sheet at December 31, 2020 has been derived from the Company’s audited condensed financial statements at such date.

Going concern

The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

The Company incurred a loss from operations of $13.4 million for the nine months ended September 30, 2021 and had a stockholders’ deficit of $13.8 million as of September 30, 2021.The Company’s forecasted cash flows from operations are insufficient to cover its operating expenses.

•

Raising additional cash through the issuance of convertible notes; and

•

Completing a reverse acquisition in accordance with the arrangement agreement entered into on September 14, 2021 with MoSys, Inc., a public company with adequate cash to fund Peraso’s operations post-transaction for at least the next 12 months. MoSys, Inc. provides both integrated circuits (ICs) and intellectual property (IP) solutions that enable fast, intelligent data access and decision making for a wide range of markets.

The material uncertainties lend significant doubt as to the ability of the Company to meet its obligations as they come due and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern. While the Company has been successful in raising financing through debt and equity financing in the past, there can be no assurance that it will be able to do so in the future.

2.	Summary of significant accounting policies

Use of estimates

Revenue recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and all its related amendments (“ASC 606”).

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

•

Identify the contract with a customer;

•

Identify the performance obligations in the contract;

•

Determine the transaction price;

•

Allocate the transaction price to the performance obligations; and

•

Recognize revenue when, or as, the Company satisfies a performance obligation.

Product revenue

Our contracts with customers are generally for products only, and do not include other performance obligations such as services, extended warranties or other material rights.

The Company may record an estimated allowance, at the time of shipment, for future returns and other charges against revenue consistent with the terms of sale.

License fees and royalty revenue

Royalty revenues are recognized based upon licensee’s use of the Company’s licensed technology. There were no royalty revenues during the nine months ended September 30, 2021 and 2020.

Engineering services revenue

Contract liabilities—deferred revenue

Receivables are recognized in the period the Company ships the product or when services are rendered to customer. Payment terms on invoiced amounts are based on contractual terms with each customer. When the Company receives consideration, or such consideration is unconditionally due, prior to transferring goods or services to the customer under the terms of a sales

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales once control of goods and/or services have been transferred to the customer and all revenue recognition criteria have been met and any constraints have been resolved. There were no deferred revenues as of September 30, 2021 and 2020.

Government subsidies

Starting in 2020, Canadian businesses, non-profit organizations, or charities who have seen a drop in revenue during the COVID-19 pandemic became eligible for a rent and wage subsidy from the government. The Company began receiving this subsidy on a monthly basis in the fourth quarter of 2020. During the nine months ended September 30, 2021 the Company recognized payroll subsidies of $1,102,616 as a reduction in the associated wage costs in operating expenses in the Statement of Operations. During the nine months ended September 30, 2021 the Company recognized rent subsidies of $195,995 as a reduction of rent expense in the Statement of Operations.

Stock-based compensation

The Company periodically issues stock options to employees and non-employees. The Company accounts for such grants based on ASC 718, Stock Compensation, whereby the value of the award is measured on the date of grant and recognized as compensation expense on a straight-line basis over the vesting period. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing (Black Scholes) model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes model.

Fair value measurements

There are three levels within the hierarchy that may be used to measure fair value:

Level 1—Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2— Other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3— Significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

The Company categorizes its cash as Level 1 fair value measurements. The Company categorizes its warrant liability as Level 3 fair value measurements. The warrant liability is measured at fair value on a recurring basis and are being marked to fair value at each reporting date until they are completely settled or meet the requirements to be accounted for as component of stockholders’ equity. The warrants are valued using the Black-Scholes option pricing model as discussed in Note 8 – Warrants.

Warrant liability

The Company issues detachable warrants with its preferred shares and convertible debentures. The warrants have exercise prices that are denominated in foreign currency (CAD) that differs from the Company’s functional currency (USD) and accordingly are accounted for as liability in accordance with ASC 815, Derivatives and hedging. These warrants are initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of these instruments, including whether such instruments should be recorded as liability or as equity, is evaluated at the end of each reporting period.

Tax credits and receivables

Intangible Assets

Intangible assets are recorded at cost and amortized on a straight-line method over the estimated useful life of 10 years.

Long-Lived Assets

The Company regularly reviews the carrying value and estimated lives of its long-lived assets and finite-lived intangible asset to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objective. Should an impairment exist, the impairment loss would be measured based on the excess of the carrying amount over the asset’s fair value.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

Foreign currency transactions

Per share amount

As of September 30, 2021, the potentially dilutive securities consisted of 22,849,273 outstanding stock options and 11,228,407 outstanding warrants.

3.	Recently issued accounting pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06 (“ASU 2020-06”), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The ASU also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. With regard to our financial reporting, ASU 2020-06 will be effective January 1, 2024, and early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company is currently evaluating what effect(s) the adoption of ASU 2020-06 may have on our financial statements, but the Company does not believe the impact of the ASU will be material to our financial position, results of operations and cash flows. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. This update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for smaller reporting companies. The Company is still evaluating the impact of this accounting guidance on our results of operations and financial position.

4.	Inventory

Inventory as of September 30, 2021 and December 31, 2020 consist of the following:


	2021		2020
Raw materials	$	842,076	$	48,000
Work in process		878,081		885,006
Finished goods		309,595		340,506

Total	$	2,029,752	$	1,273,512

Inventory reserves as of September 30, 2021 and December 31, 2020 were $235,492 and $163,879, respectively.

5.	Property and equipment

Property and equipment as of September 30, 2021 and December 31, 2020 consist of the following:


September 30, 2021	Cost		Accumulated depreciation		Net
Computer equipment	$	1,468,568	$	1,410,449	$	58,119
Furniture and fixtures		321,973		302,901		19,072
Licenses		701,678		701,678		—
Leasehold improvements		237,780		237,780		—
Laboratory Equipment		2,593,484		2,363,418		230,066
Production Equipment		5,790,490		4,220,211		1,570,279

	$	11,113,973	$	9,236,437	$	1,877,536


December 31, 2020	Cost		Accumulated depreciation		Net
Computer equipment	$	1,431,913	$	1,345,217	$	86,696
Furniture and fixtures		321,973		286,038		35,935
Licenses		701,678		694,986		6,692
Leasehold improvements		237,780		236,178		1,602
Laboratory Equipment		2,593,484		2,274,508		318,976
Production Equipment		5,770,490		3,619,300		2,151,190
Work in Progress		20,000		—		20,000

	$	11,077,318	$	8,456,227	$	2,621,091

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

Depreciation expense for the three months and nine months ended September 30, 2021 amounted to $247,688 and $780,210 respectively. Depreciation expense for the three months and nine months ended September 30, 2020 amounted to $316,640 and $1,017,120 respectively.

The Company’s production equipment is maintained overseas.

6.	Loan facilities

The loan facilities as of September 30, 2021 and December 31, 2020 consist of the following:


	September 30, 2021		December 31, 2020
SRED Financing	$	734,082	$	580,549

On November 30, 2020, the Company entered into a Loan agreement to raise funds against the Company’s present and after acquired personal property. The proceeds from first draw totaled $587,000 (CDN$750,000), which was outstanding as of December 31, 2020.

On February 5, 2021, March 5, 2021 and September 17, 2021 the Company raised additional funds from the second, third and fourth draw under the SRED financing of $274,715 (CDN$350,000), $274,715 (CDN$350,000) and $745,655 (CDN$950,000) respectively, totaling year to date gross proceeds of $1,295,085 (CDN$1,650,000) net of financing fees of $32,770 (CDN$41,750). The loan agreement for all tranches bears an interest rate of 1.6% per month, compounded monthly (20.98%). The loan was sanctioned against the Company’s tax credit refund.

The first, second and third draw including interest of $136,900 (CDN$174,417) were repaid through proceeds from the Company’s tax credit refund of $1,093,230 (CDN$1,392,831) and the balance of $184,558 (CDN$235,132) was paid from the fourth draw. The remaining loan balance of $734,082 will be repaid through proceeds from the Company’s tax credit refund.

Interest expense for the three months and nine months ended September 30, 2021 amounted to $34,571 and $140,662 respectively. Interest expense for the three months and nine months ended September 30, 2020 amounted to $17,902 and $17,902 respectively.

7.	Convertible debentures

The convertible debentures as of September 30, 2021 and December 31, 2020 consisted of the following:


	September 30, 2021			December 31, 2020
6% Convertible debentures due December 31, 2023	$	14,082,343		$	8,183,035
Accrued Interest		844,291			321,903

Total obligation	$	14,926,634		$	8,504,938
Debt discount		(5,631,051	)		(4,183,042	)

Net	$	9,295,583		$	4,321,896

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

Convertible debentures due December 31, 2023

In December 2019, the Company entered into convertible debenture agreements with total principal amount of $1,748,035 due on June 30, 2025. In March 2020, the maturity date was amended to December 31, 2023. The convertible debentures bear interest at a rate of 6% per annum and are secured by the Company’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $73,608 were recorded as debt discount. The Company also granted to a noteholder warrants to purchase 53,312 common shares of the Company. The fair value of these warrants of $45,971 was initially recorded as liability and debt discount.

During March 2020, the Company entered into convertible debenture agreements with total principal amount of $3,885,000 due on December 31, 2023. The convertible debentures bear interest rate of 6% per annum and are secured by the Company’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $433,122 were recorded as debt discount. The Company also granted to the noteholders warrants to purchase 2,160,215 common shares of the Company. The fair value of these warrants of $1,707,943 was initially recorded as liability and debt discount.

During October 2020, the Company settled a portion of its DIP loan amounting to $2,550,000 through issuance of convertible debentures that will mature on December 31, 2023. The convertible debentures bear interest rate of 6% per annum and are secured by the Company’s assets. The Company also granted to the noteholders warrants to purchase 4,468,280 common shares of the Company. The fair value of these warrants of $3,592,855 was initially recorded as liability and debt discount up to the face value of the convertible debt, and a finance expense of $1,042,856 recorded on the statement of operations for the remaining portion.

During April 2021, the Company entered into convertible debenture agreements with a total principal amount of $5,899,308 due on December 31, 2023. The convertible debentures bear interest rate of 6% per annum and are secured by the Company’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $353,958 were recorded as debt discount, resulting in cash proceeds to the Company of $5,545,350.

Upon the closing of an equity financing after September 30, 2020, all of the outstanding principal and accrued interest shall convert at a price equal to the lower of CDN$0.15 (USD$0.12) and 80% of the per share price paid by the investors in such financing. In the event of a liquidation prior to conversion or repayment, the Company shall pay an amount to the holder equal to 3 times the outstanding principal and accrued interest.

The Company also granted to the noteholders warrants to purchase 2,947,058 common shares of the Company. The fair value of these warrants of $2,604,420 was initially recorded as liability and debt discount.

The debt discount is amortized over the terms of the related convertible debentures. During the three months and nine months ended September 30, 2021, the amortization of the debt discount amounted to $625,913 and $1,510,368 respectively. During the three months and nine months ended September 30, 2020, the amortization of the debt discount amounted to $147,543 and $345,371 respectively.

For the three months and nine months ended September 30, 2021, interest expense on the convertible debentures amounted to $212,971 and $522,274 respectively. For the three months and nine months ended September 30, 2020, interest expense on the convertible debentures amounted to $84,957 and $207,169 respectively.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

8.	Warrant liability

Warrants outstanding as of September 30, 2021 and their respective exercise prices and expiration dates, were as follows:


Year Issued	Number of warrants issued		Exercise price		Expiry date
2014		594,000	CDN$	1.00		31-Dec-25
2015		90,000	CDN$	1.00		31-Aug-22
2016		417,850	CDN$	1.479		31-Dec-25
2017		161,007	CDN$	1.479		31-Dec-22
2017		336,685	CDN$	1.479		31-Dec-25
2019		53,312	CDN$	1.479		31-Dec-25
2020		2,160,215	CDN$	0.15		31-Dec-25
2020		4,468,280	CDN$	0.15		31-Dec-23
2021		2,947,058	CDN$	0.15		30-Apr-26

Total		11,228,407

Exercise prices in USD $0.78 (CDN$1.00), $1.16 (CDN$1.479), and $0.12 (CDN$0.15) translated as of September 30, 2021.

Warrant activity and the related changes in the estimated fair values during the nine months ended September 30, 2021 and 2020 were as follows:


	Number of warrants on common shares		Amount
Balance – December 31, 2020		8,281,349	$	6,705,838
Issued during the period		2,947,058		2,604,420
Change in fair value of warrants		—		(112,737	)

Balance – September 30, 2021		11,228,407	$	9,197,521

The fair value of the warrant liability is estimated using the Black-Scholes option-pricing model. The Company is a private Company and lacks Company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies within the semiconductor industry with characteristics similar to the Company. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero, based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

During April 2021, the Company granted warrants with an exercise price of CDN$0.15 ($0.12 USD) to purchase 2,947,058 common shares of the Company to certain holders of convertible debentures (Note 6). The total fair value of these warrants at grant date amounted to $2.6 million. The fair values were determined using the Black-Scholes model with the following assumptions: expected term based on the contractual term of 5 years, risk-free interest rate of 0.86% based on a comparable US Treasury Bond, expected volatility of 106.82% and expected dividend of zero.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

The fair values of the outstanding warrants as of September 30, 2021 and December 31, 2020 were calculated based on the following assumptions used in the Black-Scholes model: expected term based on the remaining contractual term of one to five years (2020: two to five years); risk-free interest rate of 0.86% (2020: 0.36%) and based on a comparable US Treasury Bond, expected volatility of 111.09% (2020: 104.37%) and expected dividend of zero.

9.	Convertible preferred shares

Authorized

Unlimited Class A, Class B and Class C preferred shares, convertible, redeemable


	Class A preferred shares						Class B preferred shares						Class C preferred shares						Total
	Number of shares			Amount			Number of shares			Amount			Number of shares			Amount			Amount
Balance – December 31, 2019		2,750,001		$	4,457,449			43,956,520		$	54,830,889			52,322,627		$	58,802,585		$	118,090,923
Dividends accrued					64,600						795,834									860,434
Amortization of issuance costs and warrants											77,151						728,425			805,576
Foreign exchange impact		—			(292,760	)		—			(3,601,223	)		—			(3,862,079	)		(7,756,062	)
Preferred shares converted into ordinary shares		(2,750,001	)	$	(4,229,289	)		(43,956,520	)	$	(52,102,651	)		(52,322,627	)	$	(55,668,931	)	$	(112,000,871	)

Balance – September 30, 2020		—			—			—			—			—			—			—

All convertible preferred shares were converted by March 31, 2020, and no additional preferred shares were outstanding as of September 30, 2021.

Convertible Class A, Class B and Class C preferred shares

The holders of the convertible Class A, Class B and Class C preferred shares have the following rights and preferences:

Voting

Each convertible Class A, Class B and Class C preferred share has voting rights equal to an equivalent number of common shares and votes together as one class with the common shares.

Conversion

In March 2020, the company filed an Articles of Amendment, where in the ratio for the conversion of the Preferred Class C shares into common shares was changed from 1:1 to 1:1.25 (Note 10).

Redemption

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

Dividends

The total dividend accrued since the issuance of Class A and Class B Preferred shares of $22,732,543 was recognized as additional paid in capital upon conversion of Preferred shares into common shares on March 13, 2020.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, the holders of each convertible Class A and Class B preferred share would receive CDN$1 ($0.79 USD) per share plus all accrued dividends. Class C preferred shareholders would receive CDN$1.4790 ($1.16 USD) and no accrued dividends. Thereafter, any assets remaining following distribution to the holders of the convertible Class A, Class B and Class C preferred shares will be distributed ratably among the holders of the convertible Class A, Class B and Class C preferred shares and common shares, provided that the maximum amount receivable for each convertible Class A and Class B preferred share is CDN$5 ($3.93 USD) and CDN$4.44 ($3.49 USD) for Class C preferred shares.

10.

Capital stock

As of September 30, 2021, the Company was authorized to issue an unlimited number of common shares.

On March 13, 2020, the Company also issued 65,403,284 common shares amounting to $66,802,718 upon conversion of all outstanding Class C preferred shares based on the amended conversion price of CDN$1.18 ($0.85 USD). As a conversion inducement, the Company amended the ratio for the conversion of the Class C preferred shares into common shares from 1:1 to 1:1.25. The Company determined that the additional common shares issuable arising from such modification totaled 13,080,657 with fair value of $11,133,786 and recognized such amount as deemed dividend.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

11.

Stock-based compensation

On September 16, 2020, Board of Directors approved the increase in number of options shares (as defined in Stock option plan) from 10% of outstanding issue to the greater of 23,169,644 or 20% of outstanding issue. As of December 31, 2020, the Company had granted 97,491 more options shares than were authorized for grant, however in the first quarter of 2021 this was corrected due to additional forfeitures. As of September 30, 2021, options shares available to grant totaled 395,370.

On September 17, 2020, Board of Directors approved the cancellation of stock options totaling 2.6 million with exercise price of CDN$0.60 ($0.47 USD) and original vesting term of 4 years and replaced such awards with option grants that have exercise price of CDN$0.15 ($0.12 USD) options and vesting period of one year. The replacement of the option grants was accounted for as modification in accordance with the provisions of ASC 718. The Company determined that the incremental fair value of the replacement awards amounted to approximately $530,000 using Black-Scholes option pricing model. At replacement date, the total compensation cost for the replacement awards was determined to be $952,000 and is amortized over the one year vesting term.

Additionally, the Board also approved the grant of stock options to employees to purchase a total of 18.7 million shares of the Company’s common stock. The options have an exercise price of CDN$0.15 ($0.12 USD) per share, expire in ten years, and have a vesting period of 4 years. The total fair value of these options at grant date was approximately $15.8 million.

On May 27, 2021, Board of Directors approved the grant of stock options to employees to purchase a total of 812,000 shares of the Company’s stock. The options have an exercise price of CDN$0.15 ($0.12 USD) per share, expire in ten years, and have a vesting period of 4 years. The total fair value of these options at grant date was $739,284.

Additionally, the Board also approved the grant of 6,729,875 options effective upon conversion of the Convertible Debentures (if any) to key employees. The options have an exercise price of CDN$0.15 ($0.12 USD) and are subject to active employment on the Conversion Date. The Board declared null and void the prior authorization on September 17, 2020 of anti-dilution options to key employees.

The fair value of each stock option is estimated at grant date using the Black-Scholes option-pricing model. The Company is a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of publicly traded set of peer companies within the semiconductor industry with characteristics similar to the Company. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero, based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The assumptions used in the Black-Scholes option pricing model were as follows: average risk-free interest rate of 0.51% (2020 – 0.46%); expected average volatility of 109.94% (2020 – 104.37%); expected stock option life of 6.25 years (2020 – 6.25 years); exercise price of CDN$0.15 ($0.12 USD) (2020 – CDN$0.15 ($0.12 USD)); and an underlying stock price of CDN$1.18 ($0.97 USD) (2020 – CDN$1.18 ($0.89 USD)).

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

A summary of stock option activity under the plan is as follows:


	Number of shares			Weighted average exercise price
Balance – December 31, 2020		23,267,135		$	0.12
Granted		812,000
Forfeited		(854,862	)	$	0.15
Exercised		(375,000	)	$	0.08

Balance – September 30, 2021		22,849,273		$	0.08

Significant exercise price ranges of options outstanding, related weighted average exercise prices and contractual life information as of September 30, 2021 were as follows:


	Options Outstanding						Options Exercisable
Exercise price range	Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.08		1,514,000		3.16	$	0.08		1,514,000	$	0.08
$0.12		21,335,273		8.61	$	0.12		—	$	0.12

		22,849,273		8.25	$	0.12		1,514,000	$	0.08

Significant exercise price ranges of options outstanding, related weighted average exercise prices and contractual life information as of December 31, 2020 were as follows:


		Options Outstanding						Options Exercisable
Exercise price range		Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price		Number exercisable		Weighted average exercise price
$	0.08		1,914,000		3.66	$	0.08		1,914,000	$	0.08
$	0.12		21,332,510		9.29	$	0.12		—	$	0.12
$	0.47		20,625		6.62	$	0.47		—	$	0.47

			23,267,135		8.83	$	0.12		1,914,000	$	0.08

The Company recorded total stock-based compensation expense for the three month and nine month period ended September 30, 2021 of $1,147,571 and $3,461,316 respectively. The Company recorded a total stock-based compensation expense for the three month and nine month period ended September 30, 2020 of $203,156 and $486,563 respectively.

As of September 30, 2021, there was $12 million of total unrecognized compensation expense related to non-vested stock options that is expected to be recognized over a weighted average period of 2.49 years. The number of vested and exercisable options totaled 1,514,000. These options had a weighted-average exercise price of $0.08 per share and a weighted-average remaining contractual term of 3.16 years as of September 30, 2021.

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

12.

Leases

Operating lease agreements

The Company has two operating leases with third parties for office space in Canada. The leases expire on September 14, 2022 and December 31, 2023. On July 21, 2021, the Company agreed to extend the operating lease for office space in Canada, which was to expire on September 14, 2021, for an additional year. Leases with an initial term of 12 months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company did not combine lease and non-lease components.

The following table provides the details of right-of-use assets and lease liabilities as of:


	September 30, 2021		December 31, 2020
Right-of-use asset	$	572,690	$	730,573
Lease liability	$	608,855	$	756,998

The Company’s lease payments during the three months and nine months ended September 30, 2021 were $59,203 and $176,713, respectively. The Company’s lease payments during the three months and nine months ended September 30, 2020 were $61,344 and $181,685, respectively.

13.

Contingencies and commitments

In the ordinary course of business and from time to time, the Company is involved in various claims related to software, intellectual property rights, commercial, employment and other claims. The Company recognizes a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in assessing both the likelihood of an unfavorable outcome and whether the amount of loss, if any, can be reasonably estimated.

On October 28, 2020, the Court granted an order authorizing the termination of Peraso’s CCAA proceedings upon the completion of certain defined steps. On November 2, 2020, Peraso provided written notice to the Monitor that these steps had been completed and, as contemplated in the CCAA Termination Order dated October 28, 2020 (the “CCAA Termination Order”), the Monitor served a Monitor’s Certificate on the service list that had the effect of, inter alia: terminating the CCAA proceedings and the Stay Period referred to in the Initial Order; discharging Ernst & Young Inc. from its duties as the Monitor; releasing certain claims in favor of the Monitor and its counsel, with certain exceptions; and terminating the Administration Charge, the Directors’ Charge, the DIP Lenders’ Charge, the Second DIP Lenders’ Charge, and the Third DIP Lenders’ Charge (as such terms are defined in the CCAA Termination Order).

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020

Notwithstanding the discharge of Ernst & Young Inc. as Monitor:

Ernst & Young Inc. and its counsel will continue to have the benefit of any of the rights, approvals, releases and protections in favor of the Monitor at law or pursuant to the CCAA, the Initial Order, and all other Orders made in these CCAA proceedings;

14.

Disaggregated revenue, Concentration of Credit Risk and Significant Customers

The Company operates in one business segment and uses one measurement of profitability for its business.

The following table represents disaggregation of revenue for the three months and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Product sales	$	1,366,920	$	298,748	$	3,015,612	$	1,191,261
Engineering services		650,000		500,000		800,000		2,000,000

	$	2,016,920	$	798,748	$	3,815,612	$	3,191,261

Customers who accounted for at least 10% of total revenue were:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Customer A		44.83	%		*			48.30	%		*
Customer B		32.52	%		63.22	%		18.50	%		62.83	%
Customer C		*			29.19	%		15.36	%		26.17	%

*	Represents percentage less than 10%

Peraso Technologies Inc.

Notes to Condensed Financial Statements (Unaudited)

For the three and nine months ended September 30, 2021 and 2020


	Three Months Ended September 30,					Nine Months Ended September 30,
	2021			2021		2021		2020
Taiwan	$	(1,977	)	$	233,158	$	586,027	$	835,020
Hong Kong		1,027,653			11,583		2,057,245		160,943
North America		974,150			525,740		1,134,900		2,124,090
Rest of the world		17,094			28,267		37,440		71,208

	$	2,016,920		$	798,748	$	3,815,612	$	3,191,261

15.

Arrangement Agreement

On September 14, 2021, the Company entered into an Arrangement Agreement with MoSys, Inc. and its newly formed subsidiaries, 2864552 Ontario Inc. (“Callco”) and 2864555 Ontario Inc. (“Canco”). Under the Agreement, MoSys, Inc., indirectly through Canco, is to acquire all of the issued and outstanding common shares of Peraso, including those Peraso Shares to be issued in connection with the conversion or exchange of secured convertible debentures of Peraso and common share purchase warrants of Peraso, as applicable, by way of a statutory plan of arrangement under the Business Corporations Act (Ontario) (the “OBCA”), on and subject to the terms and conditions of the Agreement.

The Arrangement is in substance a reverse takeover of MoSys by Peraso, in order to facilitate Peraso’s listing on Nasdaq and access to the US capital markets. Pursuant to the Arrangement Agreement, MoSys and Peraso will complete a business combination pursuant to which MoSys will indirectly acquire all of the Peraso Shares and focus its business on the current business of Peraso while continuing MoSys’ legacy business.

Pursuant to the Arrangement, Peraso Shareholders will receive MoSys Share Consideration and/or Exchangeable Share Consideration and are expected to hold 61% of the outstanding combined company Shares (on a Fully-Diluted basis) while MoSys stockholders will retain 39% of the outstanding combined company Shares (on a Fully-Diluted basis).

16.

Subsequent event

The Company evaluates events or transactions, which occur after the balance sheet date through to the date which the financial statements are issued, for potential recognition or disclosure in its financial statements in accordance with ASC 855, Subsequent Events.

On November 1, 2021, the Company issued $3.7 million of convertible debentures with a maturity date of December 31, 2023. The convertible debentures bear interest at a rate of 6% per annum and are secured by the Company’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $215,320 were recorded as debt discount. Upon the closing of an equity financing, all the outstanding principal and accrued interest shall convert at a price equal to the lower of CDN$0.15 (USD$0.12) and 80% of the per share price paid by the investors in such financing.

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial statements and related notes give effect to the reverse acquisition involving MoSys, Inc. (MoSys or the Company) and Peraso Technologies Inc. (Peraso).

On September 14, 2021, the Company and its newly formed subsidiaries, 2864552 Ontario Inc. (Callco) and 2864555 Ontario Inc. (Canco), both corporations existing under the laws of the province of Ontario, entered into an Arrangement Agreement (the Agreement) with Peraso, a corporation existing under the laws of the province of Ontario. Under the Agreement, the Company, indirectly through Canco, is to acquire all of the issued and outstanding common shares of Peraso (Peraso Shares), including those Peraso Shares to be issued in connection with the conversion or exchange of secured convertible debentures of Peraso and common share purchase warrants of Peraso, as applicable, by way of a statutory plan of arrangement (the Arrangement) under the Business Corporations Act (Ontario) (the OBCA), on and subject to the terms and conditions of the Agreement. The Agreement provides that the Peraso stockholders may elect to receive, as consideration, either shares of the Company’s common stock or shares of the capital stock of Canco (the Exchangeable Shares) in exchange for such holder’s Peraso Shares, in each case based on an exchange ratio (the Exchange Ratio) to be determined based on the number of Peraso Shares and shares of MoSys’ common stock outstanding as of immediately prior to the effective time of the Arrangement. Pursuant to the terms of the Agreement, at the effective time, the Company shall hold an aggregate of 1,815,445 Exchangeable Shares and its common stock (collectively, the Earnout Shares). Such Earnout Shares shall be escrowed pursuant to the terms of an escrow agreement on a pro rata basis from the aggregate consideration to be received by the Peraso stockholders, subject to the offset by the Company for any losses in accordance with the Agreement. Such Earnout Shares shall be released, subject to any offset claim, upon the satisfaction of the earlier of: (a) any date following the first anniversary of the Effective Time and prior to the third anniversary of the Effective Time where the volume weighted average price of the Common Stock for any 20 trading days within a period of 30 consecutive trading days is at least $8.57 per share, subject to adjustment for stock splits or other similar transaction; (b) the date of any sale of all or substantially all of the assets or shares of the Company; or (c) the date of any bankruptcy, insolvency, restructuring, receivership, administration, wind-up, liquidation, dissolution, or similar event involving the Company. Immediately following the effective time, based on the Exchange Ratio, the former stockholders of Peraso are anticipated to own approximately 61% of the economic and voting interest of the combined company with the MoSys’ current stockholders holding the remaining 39% economic and voting interest, as calculated on a fully-diluted basis and including the Earnout Shares.

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 and the nine months ended September 30, 2021, give effect to the reverse acquisition as if it occurred on January 1, 2020 and combine the historical results of Peraso and MoSys. The unaudited condensed combined statements of operations for the nine months ended September 30, 2021 combine the unaudited statement of operations for the nine months ended September 30, 2021 for each of MoSys and Peraso. The pro forma adjustments give effect to the pro forma balance sheet adjustments assuming those adjustments were made as of the beginning of the fiscal year presented and to the accounting for the reverse acquisition, as required by US GAAP.

The unaudited pro forma condensed combined balance sheet as of September 30, 2021 combines the unaudited balance sheets as of September 30, 2021 for each of Peraso and MoSys. The unaudited pro forma condensed combined balance sheet as of September 30, 2021 is presented as if the reverse acquisition of MoSys had occurred on September 30, 2021. The pro forma adjustments give effect to the accounting for the transaction as required by U.S. GAAP.

The historical financial statements of Peraso and MoSys have been adjusted in the accompanying unaudited pro forma condensed combined financial information to give effect to pro forma events that are transaction accounting adjustments that are necessary to account for the reverse acquisition. The unaudited pro forma adjustments are based upon available information and certain assumptions that our management believes are reasonable. The assumptions underlying the pro forma adjustments in the accompanying notes are described in more detail in the notes below, which should be read in conjunction with these unaudited pro forma condensed combined financial statements. These assumptions are based on preliminary estimates and information. Accordingly, the actual adjustments on the consolidated financial statements upon the completion of the transaction may materially differ from the proforma adjustments.

The reverse acquisition is being accounted for as a business combination using the acquisition method with Peraso as the accounting acquirer in accordance with Accounting Standards Codification (ASC) Topic 805, Business Combinations. Under this method of accounting, the effective consideration will be allocated to MoSys’ assets acquired and liabilities assumed based upon their estimated fair values at the date of completion of the reverse acquisition. The process of valuing the net assets of MoSys immediately prior to the reverse acquisition, as well as evaluating accounting policies for conformity, is preliminary. Any differences between the estimated fair value of the effective consideration and the estimated fair value of the assets acquired and liabilities assumed will be recorded as goodwill. Accordingly, the effective consideration allocation and related adjustments reflected in this unaudited pro forma condensed combined financial information are preliminary and subject to change based on a final determination of fair value, and those changes could differ materially from what is presented here.

The following unaudited pro forma condensed combined financial statements are prepared for illustrative purposes only and are not necessarily indicative of or intended to represent the results that would have been achieved had the transaction been consummated as of the date indicated or that may be achieved in the future. The unaudited pro forma condensed combined financial statements do not reflect any operating efficiencies and associated cost savings that may achieved with respect to the combined companies.

UNAUDITED CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2021

[Expressed in thousands of United States dollars]


	Peraso Historical			MoSys Historical			Pro Forma Adjustments			Note 3			Pro Forma Combined
ASSETS
Current assets
Cash and cash equivalents	$	1,157		$	9,820		$	(316	)		(a	)	$	10,661
Short-term investments		—			8,213			—						8,213
Accounts receivable, net		938			749			—						1,687
Prepaid expenses and other current assets		743			694			—						1,437
Tax credits and receivables		1,052			—			—						1,052
Inventories, net		2,030			1,153			—						3,183

Total current assets		5,920			20,629			(316	)					26,233
Long-term investments		—			3,203			—						3,203
Property and equipment, net		1,878			89			—						1,967
Right-of-use lease asset, net		573			155			—						728
Intangible assets, net		92			—			—						92
Other non-current assets		60			18			—						78
Goodwill		—			—			25,449			(b	)		25,449

TOTAL ASSETS	$	8,523		$	24,094		$	25,133					$	57,750

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities	$	2,523		$	1,706			—					$	4,229
Deferred revenue		—			162			—						162
Current portion of lease liabilities		259			163			—						422
Current loan facility		734			—			—						734

Total current liabilities		3,516			2,031			—						5,547
Long-term liabilities
Convertible debentures		9,296			—			(9,296	)		(e	)		—
Lease liabilities		350			—			—						350
Warrant liability		9,198			—			(9,198	)		(e	)		—

Total liabilities		22,360			2,031			(18,494	)					5,897

STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock		100,579			9			(100,566	)		(c	)		22
Additional paid-in capital		5,279			268,967			(102,404	)		(c	), (e)		171,842
Accumulated other comprehensive loss		—			(6	)		6			(d	)		—
Accumulated deficit		(119,695	)		(246,907	)		246,591			(d	)		(120,011	)

Total stockholders’ equity (deficit)		(13,837	)		22,063			43,627						51,853

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	8,523		$	24,094		$	25,133					$	57,750

See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

[Expressed in thousands of United States dollars, except number of shares]


	Peraso Historical			MoSys Historical			Pro Forma Adjustments			Note 3			Pro Forma Combined
Revenue
Product	$	3,016		$	3,405		$	—					$	6,421
License and other		800			438			—						1,238

Total revenue		3,816			3,843			—						7,659
Cost of revenue		1,973			1,315			—						3,288

Gross profit		1,843			2,528			—						4,371
Operating expenses
Research and development		7,912			3,662			—						11,574
Selling, general and administrative		5,316			3,756			285			(f	)		9,357

Total operating expenses		13,228			7,418			285						20,931

Loss from operations		(11,385	)		(4,890	)		(285	)					(16,560	)
Other income (expense)
Finance expense, net		(2,170	)		(30	)		2,033			(h	)		(167	)
Foreign exchange gain		35			—			—						35
Change in fair value of warrant liability		113			—			(113	)		(i	)		—
Other Income, net		—			632			—						632

Total other income (expense), net		(2,022	)		602			1,920						500

Net income (loss)	$	(13,407	)	$	(4,288	)	$	1,635					$	(16,060	)

Other comprehensive loss, net of tax:
Net unrealized loss on available-for-sale securities		—			(6	)		—						(6	)

Comprehensive loss	$	(13,407	)	$	(4,294	)	$	1,635					$	(16,066	)

Loss per common share - basic and diluted	$	(2.53	)										$	(0.82	)
Weighted average number of common shares outstanding - basic and diluted		5,292						14,410			(j	)		19,702

See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2020

[Expressed in thousands of United States dollars, except number of shares]


	Peraso Historical			MoSys Historical			Pro Forma Adjustments			Note 3			Pro Forma Combined
Revenue
Product	$	1,540		$	5,933		$	—					$	7,473
License and other		7,550			862			—						8,412

Total revenue		9,090			6,795			—						15,885
Cost of revenue		1,748			2,329			—						4,077

Gross profit		7,342			4,466			—						11,808
Operating expenses
Research and development		7,529			3,989			—						11,518
Selling, general and administrative		7,958			4,028			696			(f	),(g)		12,682

Total operating expenses		15,487			8,017			696						24,200

Loss from operations		(8,145	)		(3,551	)		(696	)					(12,392	)
Other income (expense)
Finance expense, net		(2,101	)		(243	)		945			(h	)		(1,399	)
Foreign exchange loss		(77	)		—			—						(77	)
Change in fair value of warrant liability		96			—			(96	)		(i	)		—
Other income, net		—			14			—						14

Total other income (expense), net		(2,082	)		(229	)		849						(1,462	)

Net loss		(10,227	)		(3,780	)		153						(13,854	)

Deemed dividend on inducement of conversion of Class C Preferred Shares		(11,134	)		—			—						(11,134	)
Deemed dividend for warrant exercise price adjustment		—			(392	)		—						(392	)
Accretion of preferred shares presented as dividends		(1,666	)		—			—						(1,666	)
Effect of foreign exchange on preferred shares		7,756			—			—						7,756

Net loss attributable to common stockholders	$	(15,271	)	$	(4,172	)	$	153					$	(19,290	)

Loss per common share - basic and diluted	$	(3.57	)										$	(1.03	)
Weighted average number of common shares outstanding - basic and diluted		4,276						14,410			(j	)		18,686

See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1. BASIS OF PRESENTATION

The unaudited pro forma condensed combined financial information and related notes are prepared in accordance with Article 11 of Regulation S-X, as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

The historical financial statements of Peraso and MoSys were prepared in accordance with U.S. GAAP and presented in U.S. dollars. Certain reclassifications were made to align the financial statement presentation. With the information currently available, Peraso has determined that no significant adjustments are necessary to conform MoSys’ financial statements to the accounting policies used by Peraso.

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in accordance with ASC 805 for reverse acquisitions, with Peraso as the accounting acquirer, using the fair value concepts defined in ASC 820, Fair Value Measurement, and based on the historical financial statements of Peraso and MoSys. Under ASC 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their assumed acquisition date fair value, while transaction costs associated with the business combination are expensed as incurred. The excess of consideration effectively transferred over the estimated fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

The allocation of the purchase price depends upon certain estimates and assumptions, all of which are preliminary. The allocation of the purchase price has been made for the purpose of developing the unaudited pro forma condensed combined financial information. The final determination of fair values of assets acquired and liabilities assumed relating to the merger could differ materially from the preliminary allocation of the aggregate consideration. The final valuation will be based on the actual net tangible and intangible assets of MoSys existing at the acquisition date.

The unaudited pro forma condensed combined financial information does not reflect any anticipated synergies, operating efficiencies or cost savings that may result from the merger or any acquisition and integration costs that may be incurred. The pro forma adjustments represent Peraso management’s best estimates and are based upon currently available information and certain assumptions that Peraso believes are reasonable under the circumstances.

2. PRELIMINARY PURCHASE PRICE ALLOCATION

The preliminary allocation of the purchase price to the acquired assets and assumed liabilities was based upon the preliminary estimate of fair values of the acquired assets and assumed liabilities. The unaudited pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances. The purchase price adjustments relating to the combined financial information are preliminary and subject to change, as additional information becomes available and as additional analyses are performed. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.

The purchase price for the reverse acquisition was calculated by Peraso, the accounting acquirer, as the fair value of the consideration effectively transferred. In accordance with ASC 805, the consideration effectively transferred between MoSys (a public company as the accounting acquiree) and Peraso (a private company as the accounting acquirer), was calculated as the fair value of MoSys’ equity including the fair value of its common shares outstanding and its warrants plus the portion of the share-based award fair value allocated to the pre-combination service of the accounting acquiree’s awards. The estimated value of the total consideration effectively transferred is summarized in the following table:


($ and shares in thousands)
MoSys share price (i)	$	5.34
MoSys common shares outstanding (ii)		8,686

Fair value of MoSys’ common shares outstanding	$	46,383
Fair value of MoSys’ warrants (iii)	$	434
Total fair value of MoSys’ share-based awards (iii)	$	1,158
Percent related to pre-combination service		60	%

Fair value of MoSys’ pre-combination service share-based awards	$	695

Preliminary estimate of consideration effectively transferred	$	47,512

(i)	Represents MoSys’ share price as of September 14, 2021 (date of the arrangement agreement)

(ii)	Represents MoSys’ outstanding shares as of September 30, 2021

(iii)

Represents the fair value calculated as of September 14, 2021 (date of the arrangement agreement)

The preliminary estimated consideration could significantly differ from the amounts presented due to movements in the MoSys share price up to the closing date. A sensitivity analysis related to the fluctuation in the MoSys share price was performed to assess the impact on the estimated consideration that a hypothetical change of 30% on the closing share price on September 14, 2021 of $5.34 would have:


	Stock Price		Total Estimated Consideration (000’s)
30% increase	$	6.94	$	61,410
30% decrease	$	3.74	$	33,615

The following table reflects the allocation of the purchase price to the estimated fair values assigned to the acquired tangible assets and assumed liabilities of the accounting acquiree, MoSys, with the excess recorded as goodwill.


($ in thousands)	Amount
Assets:
Current assets	$	20,629
Non-current assets		3,465
Goodwill		25,449
Liabilities:
Current liabilities		2,031
Non-current liabilities		—

Preliminary estimated purchase price	$	47,512

3. PRO FORMA ADJUSTMENTS

Adjustments to the pro forma condensed combined balance sheet

(a)

Reflects adjustment to cash and cash equivalents and accumulated deficit for both MoSys’ and Peraso’s additional transaction costs related to the reverse acquisition incurred subsequent to September 30, 2021. These costs include legal and financial advisory, accounting and consulting costs.

(b)

Preliminary goodwill adjustment, which represents the excess of the estimated aggregate purchase price over the preliminary fair value of the underlying assets acquired and liabilities assumed.

(c)

Preliminary adjustment to revalue the stockholder’s equity and additional paid in capital of the combined entity to equal the sum of (1) Peraso’s (accounting acquirer’s) equity immediately before the reverse acquisition, and (2) the fair value of MoSys’ (accounting acquiree’s) equity (i.e., the consideration effectively transferred). The stockholder’s equity balance is adjusted to reflect the par value of the outstanding shares of MoSys (accounting acquiree), including the number of shares issued in the reverse acquisition, and the remaining fair value is recognized in additional paid in capital.

(d)

Reflects the elimination of MoSys’ accumulated deficit and other comprehensive loss.

(e)

Reflects the transaction related conversion of the Peraso convertible debentures into common shares and settlement of Peraso warrants into common shares.

Adjustments to the pro forma condensed combined statement of operations

(f)

Reflects adjustment to selling, general and administrative expense to record the stock-based compensation expense related to the issuance of an additional 6.7 million Peraso options to purchase shares of Peraso’s common stock to key employees upon completion of the transaction.


($ in thousands)	For the nine months ended September 30, 2021		For the year ended December 31, 2020
Stock-based compensation expense	$	285	$	380

(g)

Reflects adjustment to selling, general and administrative expense related to additional transaction costs of $316,000 incurred by MoSys and Peraso subsequent to September 30, 2021. A total of $1.95 million in transaction costs were included in the historical income statements of MoSys and Peraso for the nine months ended September 30, 2021. The transaction costs are nonrecurring in nature and will not affect the combined statement of operations beyond twelve months after the acquisition date.

(h)

Reflects the elimination of the interest expense on the convertible debentures and debt discount amortization related to the conversion of the convertible debentures to common shares of Peraso as a result of the reverse acquisition.

(i)

Reflects the elimination of the fair value gain/loss of the warrants related to the warrants being settled and converted to common shares as a result of the reverse acquisition.

(j)

The basic and diluted pro-forma weighted average shares outstanding include the number of common shares outstanding of the accounting acquirer, Peraso, multiplied by the exchange ratio, and the issuance of common shares in connection with the convertible debenture and warrant conversion as a result of the transaction, and the number of common shares outstanding of the accounting acquiree, MoSys, at the transaction date. In accordance with ASC 260, any contingently issuable shares held in escrow are not included in the number of weighted average common shares outstanding for the loss per share calculation.


(shares in thousands)	For the nine months ended September 30, 2021			For the year ended December 31, 2020
Pro forma weighted average shares - basic and diluted
Peraso weighted average shares outstanding multiplied by the exchange ratio		5,292			4,276
Issuance of common shares in connection with conversion of convertible debentures & warrants		7,539			7,539
Earnout shares held in escrow		(1,815	)		(1,815	)
MoSys common shares outstanding at transaction date		8,686			8,686

Pro forma weighted average shares - basic and diluted		19,702			18,686