Form DEFM14A MoSys, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

MoSys, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

MOSYS, INC.

2309 Bering Drive

San Jose, California 95131

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 23, 2021

We hereby give notice that a Special Meeting of Stockholders of MoSys, Inc. (“MoSys”) will be held on November 23, 2021, at 11:00 a.m., Pacific Time (the “Special Meeting”). The purpose of the Special Meeting is to hold a vote of the stockholders of MoSys regarding:

(1)    the issuance of up to 15,000,000 shares of Common Stock of MoSys, par value $0.001 per share (“Common Stock”), prior to effecting any reverse split of the Common Stock as contemplated herein, in connection with a proposed arrangement (the “Arrangement”) with Peraso Technologies Inc. (“Peraso”), pursuant to which MoSys will acquire Peraso, in accordance with the requirements of the Nasdaq Stock Market LLC together with the approval of the entirety of transactions contemplated by the Arrangement including the change of control (the “Arrangement Proposal”);

(2)    the adoption of an amendment to the Restated Certificate of Incorporation, as amended, of MoSys to implement a reverse stock split of the shares of the issued and outstanding shares of Common Stock by a ratio of up to 1-for-3 (the “Stock-Split Proposal”), with the exact ratio of the reverse stock split to be determined by the MoSys Board;

(3)    the approval of an amendment and restatement to the MoSys 2019 Stock Incentive Plan, as more fully described in the accompanying proxy statement (the “Incentive Plan Proposal”); and

(4)    the approval of the postponement or adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes to approve proposals (1) to (3) or in the absence of a quorum (the “Adjournment Proposal”).

The Arrangement will not be completed, without the approval by the MoSys stockholders of the Arrangement Proposal and the Incentive Plan Proposal. The Stock-Split Proposal, however, is not contingent upon the approval of the Arrangement Proposal or the Incentive Proposal and may be effected by MoSys Board in the event the closing under the Arrangement Agreement does not occur.

No other business may be transacted at the Special Meeting.

Due to the public health impact of the COVID-19 pandemic and to support the health and well-being of our employees and stockholders, the Special Meeting will be held in a virtual meeting format at www.virtualshareholdermeeting.com/MOSY2021SM.

In addition to voting by submitting your proxy prior to the Special Meeting, you also will be able to vote your shares electronically during the Special Meeting. Further details regarding the virtual meeting are included in the accompanying proxy statement.

Pursuant to Delaware law and our bylaws, only stockholders of record on the Record Date, which is October 14, 2021, are entitled to notice of, and to vote at, the Special Meeting or any adjournment. It is important that your shares be represented at this meeting so that the presence of a quorum is assured.

The MoSys Board has unanimously concluded that the Arrangement is in the best interests of MoSys and its stockholders and has approved and authorized the Arrangement.

The MoSys Board unanimously recommends that the stockholders vote FOR:

Your vote is important. Even if you plan to virtually attend the Special Meeting, please date and execute the enclosed proxy and return it promptly in the enclosed postage-paid envelope as soon as possible. If you attend the Special Meeting, you may revoke your proxy and vote your shares during the Special Meeting.

If you have any questions or need assistance in your consideration of the Arrangement or with the completion and delivery of your proxy, please contact Kingsdale Advisors, our proxy solicitor, by calling toll-free at 877-659-1822 or collect at 416-867-2272, or via e-mail at contactus@kingsdaleadvisors.com.

IF YOU PLAN TO ATTEND:

To be admitted to the Special Meeting at www.virtualshareholdermeeting.com/MOSY2021SM you must have your control number available and follow the instructions found on your proxy card or voting instruction form. You may vote during the Special Meeting by following the instructions available on the Special Meeting website during the Special Meeting. Please allow sufficient time before the Special Meeting to complete the online check-in process. Your vote is very important.

Proxy Statement Table of Contents

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MOSYS, INC.

2309 Bering Drive

San Jose, California 95131

PROXY STATEMENT

FOR THE

SPECIAL MEETING OF STOCKHOLDERS

To be held on November 23, 2021

Unless the context requires otherwise, references in this proxy statement to “MoSys,” “MOSY,” “we,” “us,” or “our” refers to MoSys, Inc.

The board of directors of MoSys (the “MoSys Board”) is soliciting your proxy to vote at the Special Meeting to be held on November 23, 2021, at 11:00 a.m., Pacific Time, in a virtual online format by accessing www.virtualshareholdermeeting.com/MOSY2021SM and at any adjournment thereof.

This proxy statement contains information relating to the Special Meeting, which will be held as a virtual meeting. Stockholders attending the Special Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend and participate in the Special Meeting online via a live webcast by visiting www.virtualshareholdermeeting.com/MOSY2021SM. In addition to voting by submitting your proxy prior to the Special Meeting, you also will be able to vote your shares electronically during the Special Meeting.

The purpose of the Special Meeting is to hold a vote of MoSys’ stockholders regarding the following proposals:

(1)    the issuance of up to 15,000,000 shares of Common stock of MoSys, par value $0.001 per share (“Common Stock”), prior to effecting any reverse split of the Common Stock as contemplated herein, in connection with a proposed arrangement (the “Arrangement”) with Peraso Technologies Inc. (“Peraso”), pursuant to which MoSys will acquire Peraso, in accordance with the requirements of the Nasdaq Stock Market LLC together with the approval of the entirety of transactions contemplated by the Arrangement including the change of control (the “Arrangement Proposal”);

(2)    the adoption of an amendment to the Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), of MoSys to implement a reverse stock split of the shares of Common Stock by a ratio of up to 1-for-3 (the “Stock-Split Proposal”), with the exact ratio of the reverse stock split to be determined by the MoSys Board;

(3)    the approval of an amendment and restatement to the MoSys 2019 Stock Incentive Plan, as more fully described in the accompanying proxy statement (the “Incentive Plan Proposal”);

(4)    the approval of the postponement or adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes to approve proposals (1) to (3) or in the absence of a quorum (the “Adjournment Proposal”).

The Arrangement will not be completed, without the approval by the MoSys stockholders of the Arrangement Proposal and the Incentive Plan Proposal. The Stock-Split Proposal, however, is not contingent upon the approval of the Arrangement Proposal or the Incentive Proposal and may be effected by MoSys Board in the event the closing under the Arrangement Agreement does not occur.

No other business may be transacted at the Special Meeting.

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The MoSys Board unanimously recommends that the stockholders vote FOR:

Whether or not you expect to attend the Special Meeting, we urge you to vote your shares via proxy at your earliest convenience. This will ensure the presence of a quorum at the Special Meeting. Promptly voting your shares will save us the expenses and extra work of additional solicitation. Submitting your proxy now will not prevent you from voting your shares at the Special Meeting if you desire to do so, as your proxy is revocable at your option. Your vote is important, so please act today.

Information Concerning the Special Meeting

Mailing and Solicitation. Proxies are being solicited on behalf of the MoSys Board. This proxy statement and accompanying form of proxy card will be sent on or about October 18, 2021, to stockholders entitled to vote at the Special Meeting. The cost of the solicitation of proxies will be paid by MoSys. The solicitation is to be made primarily by mail but may be supplemented by telephone calls and personal solicitation by Kingsdale Advisors, our proxy solicitor, or our officers and other employees.

Proxies. Whether or not you plan to attend the Special Meeting, we request that you promptly submit the enclosed proxy card and vote your shares pursuant to the voting instructions therein. A control number, located on the proxy card, is designed to verify your identity, allow you to vote your shares, and confirm that your voting instructions have been properly recorded.

If you are a beneficial owner of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares does not have the authority to vote on the matter with respect to those shares. This is generally referred to as a “broker non-vote.” We believe that the Stock-Split Proposal and the Adjournment Proposal constitute routine matters. The “routine” treatment of these proposals does not affect the seriousness with which we treat it. We do not believe that any of the other proposals involve matters that will be considered routine under the relevant securities exchange rules. We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided by such organization.

Revocation of Proxies. You may revoke your proxy at any time before a vote is taken by notifying MoSys in writing at our address given above, by executing a new proxy bearing a later date, or by submitting a new proxy by telephone or Internet; or by virtually attending the Special Meeting and voting during the meeting. If you are a “street name” holder, your bank, broker, or other nominee should provide instructions explaining how you may change or revoke your voting instructions.

Voting in Accordance with Instructions. The shares represented by your properly completed proxy will be voted in accordance with your instructions marked on it. If you properly sign, date, and deliver to us your proxy but you mark no instructions on it, the shares represented by your proxy will be voted FOR the Arrangement Proposal, the Stock-Split Proposal, the Incentive Plan Proposal, and the Adjournment Proposal.

Quorum and Voting Rights. The presence at the Special Meeting virtually or by proxy of a majority of the outstanding shares entitled to vote on the Record Date (defined infra) constitutes a quorum for purposes of voting on a particular matter and conducting business at the Special Meeting. Common Stock is the only class of stock that is issued and outstanding. Each share of Common Stock entitles its holder to one vote.

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Required Vote, Abstentions, and Broker Non-Votes.

Assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of Common Stock as of the Record Date is required to adopt the Stock-Split Proposal. Approval of the Arrangement Proposal, the Incentive Plan Proposal, and the Adjournment Proposal requires the affirmative vote of the holders of shares of Common Stock representing a majority of the holders of all of the shares of Common Stock present in person or represented by proxy and entitled to vote on such matters.

If a stockholder abstains from voting, that abstention will have the same effect as if the stockholder voted “AGAINST” the proposal. Abstentions will be counted for purposes of determining the presence or absence of a quorum.

If you are a beneficial owner of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares does not have the authority to vote on the matter with respect to those shares. This is generally referred to as a “broker non-vote.”

We believe that the Stock-Split Proposal and the Adjournment Proposal constitute a routine matter. We do not believe that any of the other proposals involve matters that will be considered routine under the relevant securities exchange rules. The “routine” treatment of these proposals does not affect the seriousness with which we treat it. We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided by such organization.

Broker non-votes are considered “shares present” for the purpose of determining whether a quorum exists. Broker non-votes will not be counted as present and are not entitled to vote on the Arrangement Proposal and Incentive Plan Proposal, thus, will have no effect on the outcome of such proposals. The Stock-Split Proposal and the Adjournment Proposal are “routine” proposals and no broker non-votes are expected.

Record Date. The close of business on October 14, 2021, has been fixed as the record date of the Special Meeting, and only stockholders of record at that time will be entitled to vote. As of October 14, 2021, there were 8,685,635 shares of Common Stock issued and outstanding and entitled to vote at the Special Meeting. Only record holders and beneficial owners who held shares on the record date, or their duly authorized proxies, may attend the Special Meeting.

No Appraisal Rights. Under the Delaware General Corporation Law, MoSys stockholders are not entitled to appraisal rights with respect to the matters to be voted on at the Special Meeting.

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INFORMATION CONTAINED IN THIS PROXY STATEMENT

No person has been authorized to give any information or to make any representation in connection with the matters being considered herein on behalf of MoSys other than those contained in this proxy statement and, if given or made, such information or representation should not be considered or relied upon as having been authorized. This proxy statement does not constitute an offer to sell, or a solicitation of an offer to acquire, any securities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorized or permitted or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or proxy solicitation. Neither the delivery of this proxy statement nor any distribution of securities referred to herein should, under any circumstances, create any implication that there has been no change in the information set forth herein since the date of this proxy statement.

Information contained in this proxy statement should not be construed as legal, tax, or financial advice and MoSys stockholders are urged to consult their own professional advisers in connection with the matters considered in this proxy statement.

THE ARRANGEMENT HAS NOT BEEN RECOMMENDED BY, OR APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES REGULATORY AUTHORITY OF ANY U.S. STATE NOR HAS ANY OF THEM PASSED UPON THE FAIRNESS OR MERITS OF THE ARRANGEMENT OR THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, the documents to which we refer you in this proxy statement and information included in oral statements or other written statements made or to be made by us or on our behalf may include predictions, estimates, and other information that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). These forward-looking statements do not directly or exclusively relate to historical facts, including, without limitation, statements relating to the completion of the Arrangement, its results and projections. Without limiting the generality of the foregoing, words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “would,” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Stockholders are cautioned that any forward-looking statements are not guarantees of future performance. These statements are based on the beliefs of the management of MoSys or Peraso, as the case may be, as well as the current expectations and assumptions, which such management believes to be reasonable, based on available information and involve a number of risks and uncertainties, all of which are difficult or impossible to predict accurately and many of which are beyond our control. As such, our actual results may differ significantly from those expressed in any forward-looking statements.

These risks and uncertainties include, but are not limited to, factors and matters described or incorporated by reference in this proxy statement and the following factors:

Additional factors that may affect the future results of the Combined Company are set forth in filings that MoSys makes with the SEC from time to time, including its Annual Report on Form 10-K for the year ended December 31, 2020 and most recent filings of Forms 10-Q, which are available on the SEC’s website at

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www.sec.gov, as well as under the “Risk Factors” section of this proxy statement. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

In light of the significant risks and uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that such results will be achieved, and readers are cautioned not to place undue reliance on such forward-looking information, which speak only as of the date hereof. Except as required by law, we undertake no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For all of these reasons, MoSys stockholders should not place undue reliance on forward-looking statements.

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CURRENCY AND EXCHANGE RATES

Unless otherwise indicated herein, references to “$,” “US$” or “United States dollars” are to United States dollars, and references to “CAD$” or “Canadian dollars” are to Canadian dollars.

The rate of exchange on September 14, 2021 (being the date of the Arrangement Agreement) as reported by the Bank of Canada for the conversion of Canadian dollars into United States dollars was CAD$1.00, which equals US$0.7898 and for the conversion of United States dollars into Canadian dollars was US$1.00, which equals CAD$1.2661.

The following table sets forth, for each of the periods indicated, the high, low and average spot rates for US$1.00 in terms of Canadian dollars, as reported by the Bank of Canada.

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GLOSSARY OF DEFINED TERMS

In this proxy statement, unless otherwise defined herein or unless there is something in the subject matter inconsistent therewith, the following terms have the respective meanings set out below, words importing the singular number include the plural and vice versa and words importing any gender include all genders.

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QUESTIONS AND ANSWERS ABOUT PROXY MATERIALS AND VOTING

Questions and Answers in Connection with the Special Meeting

Why am I receiving this proxy statement and proxy card?

You are receiving this proxy statement and proxy card because you were a stockholder of record, or beneficial stockholder, of MoSys at the close of business on October 14, 2021, and are entitled to vote at the Special Meeting. This proxy statement describes issues on which MoSys would like you, as a stockholder, to vote. It provides information on these issues so that you can make an informed decision. You do not need to virtually attend the Special Meeting to vote your shares of Common Stock.

When you sign the proxy card, you appoint each of Daniel Lewis, Chief Executive Officer of MoSys, and James Sullivan, Chief Financial Officer of MoSys, as your representatives at the Special Meeting. As your representatives, they will cast your votes at the Special Meeting as you have instructed on your proxy card. With proxy voting, your shares of Common Stock will be voted whether or not you attend the Special Meeting. Even if you plan to attend the Special Meeting, it is a good idea to complete, sign, and return your proxy card in advance of the Special Meeting such that your votes are cast if you become unable to attend.

Who is soliciting my proxy?

Your proxy is being solicited by senior management of MoSys. This proxy statement is furnished in connection with that solicitation. While it is anticipated that solicitation of proxies for the Special Meeting will be made primarily by mail, proxies may be solicited personally, or by telephone by the directors and regular employees of MoSys at nominal cost paid by MoSys. In addition, MoSys has engaged Kingsdale Advisors as its proxy solicitor in connection with the Special Meeting.

If you have questions or need assistance completing your form of proxy or voting instruction form, please contact MoSys’ proxy solicitor, Kingsdale Advisors, by calling toll-free at 877-659-1822 or collect at 416-867-2272, or via e-mail at [email protected].

When is the Record Date for the Special Meeting?

The MoSys Board has fixed October 14, 2021 as the Record Date for the Special Meeting. Only holders of shares of Common Stock as of the close of business on that date will be entitled to vote at the Special Meeting.

How many shares of Common Stock are outstanding?

As of the Record Date, 8,685,635 shares of Common Stock were issued and outstanding.

How many votes do I get?

Each share of Common Stock is entitled to one vote. Appraisal rights are not applicable to any of the matters being voted upon.

How do I attend the Special Meeting?

The Special Meeting will be held on November 23, 2021, at 11:00 a.m., Pacific Time in a virtual format online by accessing www.virtualshareholdermeeting.com/MOSY2021SM, where you will be able to listen to the meeting live and vote online. To attend, vote and be deemed present in person at the virtual meeting, you will need to log on to the virtual meeting website at www.virtualshareholdermeeting.com/MOSY2021SM and enter the 16-digit control number included on your proxy card or voting instruction form. Because the Special Meeting is completely virtual and being conducted via live webcast, stockholders will not be able to attend the meeting in person.

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The meeting webcast will begin promptly at 11:00 a.m., Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 10:45 a.m., Pacific Time, and you should allow ample time for the check-in procedures. Whether or not you plan to attend the virtual Special Meeting, we encourage you to vote and submit your proxy in advance of the meeting by one of the methods described in this proxy statement. You may also vote online and examine our stockholder list during the Special Meeting by following instructions provided on the meeting website, which may be accessed using the above web address and the 16-digit control number included on your proxy card or voting instruction form, during the Special Meeting.

What proposals will be voted on at the Special Meeting?

MoSys stockholders will vote on the following proposals:

The Arrangement will not be completed, without the approval by the MoSys stockholders of the Arrangement Proposal and the Incentive Plan Proposal. The Stock-Split Proposal, however, is not contingent upon the approval of the Arrangement Proposal or the Incentive Proposal and may be effected by MoSys Board in the event the closing under the Arrangement Agreement does not occur.

The MoSys Board unanimously recommends that the stockholders vote FOR:

How do I vote?

MoSys stockholders of record and beneficial owners of shares of Common Stock on the Record Date may vote their shares of Common Stock by submitting a proxy or may vote virtually online at the Special Meeting by following the instructions provided on the proxy card or voting instruction form received. MoSys recommends that MoSys stockholders entitled to vote submit a proxy prior to the Special Meeting even if they plan to attend the virtual Special Meeting.

MoSys stockholders are encouraged to submit a proxy promptly. Each valid proxy received in time will be voted at the Special Meeting according to the choice specified, if any. Executed but uninstructed proxies (i.e., proxies that are properly signed, dated, and returned but are not marked to tell the proxies how to vote) will be voted in accordance with the recommendations of the MoSys Board.

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Record Holders

MoSys stockholders of record may vote in one of the following ways:

Internet: www.proxypush.com/mosy. Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.

Telephone: 1-866-883-3382. Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

Mail: Mark, sign and date your proxy card and return it in the postage-paid envelope provided. MoSys stockholders who vote this way should mail the proxy card early enough so that it is received prior to the closing of the polls at the Special Meeting.

Online During the Virtual Meeting: MoSys stockholders of record may attend the virtual Special Meeting by entering his, her, or its unique 16-digit control number and vote online; attendance at the virtual Special Meeting will not, however, in and of itself constitute a vote or a revocation of a prior proxy.

Beneficial Owners

MoSys stockholders who hold their shares of Common Stock beneficially in “street name” and wish to submit a proxy must provide instructions to the bank, broker, or other nominee that holds their shares of record as to how to vote their shares with respect to the MoSys stock issuance proposal. Most beneficial owners will have a choice of voting before the Special Meeting by proxy over the Internet, by telephone, or by using a voting instruction form. Each beneficial owner of Common Stock should refer to the voting instruction form received to see what options are available and how to use them. MoSys stockholders who hold their shares of Common Stock beneficially and wish to vote virtually at the Special Meeting may do so by attending the Special Meeting, entering his, her, or its unique 16-digit control number and voting their shares electronically; however attendance at the virtual Special Meeting will not, in and of itself, constitute a vote or a revocation of a prior proxy. If you are a beneficial owner but did not receive a 16-digit control number with your voting instruction form, contact the bank, broker, or other nominee that holds your shares of record.

What if I change my mind after I return my proxy?

You may revoke your proxy and change your vote at any time before the polls close at the Special Meeting. You may do this by notifying our secretary in writing at the address of MoSys given above, by executing a new proxy bearing a later date, or by submitting a new proxy by telephone or Internet; or by attending the Special Meeting and voting virtually.

How many votes do you need to hold the Special Meeting?

To conduct the Special Meeting, MoSys must have a quorum, which means that a majority of the outstanding shares of Common Stock as of the Record Date that are entitled to vote at the Special Meeting must be virtually present or represented at the Special Meeting. Shares of Common Stock are the only type of security entitled to vote at the Special Meeting.

Based on 8,685,635 shares of Common Stock outstanding as of the Record Date, 4,342,818 shares of Common Stock must be present at the Special Meeting, virtually or by proxy, for there to be a quorum. Your shares of Common Stock will be counted as present at the Special Meeting if you submit a properly executed proxy card (even if you do not provide voting instructions), or virtually attend the Special Meeting and vote. In the event that a quorum is not present at the Special Meeting, it is expected that the meeting will be adjourned to solicit additional proxies.

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What if I abstain from voting?

Abstentions with respect to a proposal at the Special Meeting are counted for the purposes of establishing a quorum. A properly executed proxy card marked “ABSTAIN” with respect to a proposal at the Special Meeting will have the same effect as voting “AGAINST” that proposal.

What effect does a broker non-vote have?

If you are a beneficial owner of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares does not have the authority to vote on the matter with respect to those shares. This is generally referred to as a “broker non-vote.”

We believe that the Stock-Split Proposal and the Adjournment Proposal constitute a routine matter. We do not believe that any of other proposals involve matters that will be considered routine under the relevant securities exchange rules. The “routine” treatment of these proposals does not affect the seriousness with which we treat it. We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided by such organization.

Broker non-votes are considered “shares present” for the purpose of determining whether a quorum exists. Broker non-votes will not be counted as present and are not entitled to vote on the Arrangement Proposal and Incentive Plan Proposal, thus, will have no effect on the outcome of such proposals. The Stock-Split Proposal and the Adjournment Proposal are “routine” proposals and no broker non-votes are expected.

How many votes are needed to approve the proposals?

Assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of Common Stock as of the Record Date is required to adopt the Stock-Split Proposal. Approval of the Arrangement Proposal, the Incentive Plan Proposal, and the Adjournment Proposal requires the affirmative vote of the holders of shares of Common Stock representing a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote on such matter will be required for approval of this proposal.

We encourage you to vote “FOR” the Arrangement Proposal, the Stock-Split Proposal, the Incentive Plan Proposal, and the Adjournment Proposal.

Will my shares of Common Stock be voted if I do not sign and return my proxy card?

If your shares of Common Stock are held through a brokerage account, your brokerage firm, cannot vote your shares of Common Stock on the Arrangement Proposal and the Incentive Plan Proposal at the Special Meeting unless you provide directions as to how to vote your shares of Common Stock, because such matters are non-routine matters. See “What effect does a broker non-vote have?” above for a discussion of the consequences if you fail to provide your brokerage firm with instructions as to how to vote your shares of Common Stock.

If your shares of Common Stock are registered in your name, and you do not complete your proxy card over the Internet or sign and return your proxy card, your shares of Common Stock will not be voted at the Special Meeting on the Arrangement Proposal and the Incentive Plan proposal unless you virtually attend the Special Meeting and vote your shares of Common Stock.

Where can I find the voting results of the Special Meeting?

MoSys will publish the final results in a Current Report on Form 8-K with the SEC following the Special Meeting.

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Who will pay for the costs of soliciting proxies?

MoSys will bear the cost of soliciting proxies. In an effort to have as large a representation at the Special Meeting as possible, MoSys’ directors, officers, and employees may solicit proxies by telephone or in person in certain circumstances. These individuals will receive no additional compensation for their services other than their regular salaries.

MoSys has retained Kingsdale Advisors as its proxy solicitor to assist MoSys in soliciting proxies. MoSys estimates the fees for Kingsdale Advisors associated with this proxy solicitation will be approximately $15,000 plus charges for any telephone calls and disbursements.

Upon request, MoSys will reimburse brokers, dealers, banks, voting trustees, and their nominees who are holders of record of shares of Common Stock on the Record Date for the reasonable expenses incurred for mailing copies of the proxy materials to the beneficial owners of such shares of Common Stock.

What materials accompany or are attached to this proxy statement?

The following materials accompany or are attached to this proxy statement:

Questions and Answers in Connection with the Arrangement and Related Transactions

What is the Arrangement between MoSys and Peraso?

The Arrangement is in substance a reverse takeover of MoSys by Peraso, in order to integrate economic potential and business lines of the entities and facilitate Peraso’s listing on Nasdaq and access to the U.S. 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 the Combined Company will focus its business on the current business of Peraso while continuing MoSys’ legacy business.

The Arrangement provides that MoSys will acquire Peraso pursuant to the Arrangement Agreement and Plan of Arrangement under Ontario law. Under the Arrangement, the issued and outstanding Peraso Shares will be exchanged for shares of Common Stock or Exchangeable Shares in accordance with the Plan of Arrangement.

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After the Effective Time of the Arrangement, each Exchangeable Share will be exchangeable for one Combined Company Share in accordance with their terms. While outstanding, the Special Voting Share will enable holders of Exchangeable Shares to cast votes on matters for which holders of the Combined Company Shares 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 Combined Company Shares. Eligibility to elect to receive Exchangeable Shares will be subject to certain Canadian residency restrictions and tax statuses.

The Arrangement Agreement further provides that MoSys will submit to its stockholders a proposal to amend MoSys’ Certificate of Incorporation to effect a reverse split of the issued and outstanding shares of Common Stock, if necessary to maintain compliance with the listing standards of Nasdaq. MoSys is fulfilling these requirements through this proxy statement.

The consummation of the Arrangement is subject to certain closing conditions, including the requirements that:

The completion of the Arrangement is also subject to the certain conditions precedent in favor of MoSys and Peraso, respectively, that include the receipt of all other required regulatory approvals, performance of all

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covenants by the pertinent parties, accuracy of the parties’ representations and warranties, as well as other customary closing conditions, including the absence of a Material Adverse Effect with respect to either Peraso or MoSys. See “The Arrangement Agreement — ARTICLE 6 CONDITIONS”

The Arrangement has been unanimously approved by the Peraso Board, and shareholders representing approximately 57.44% of the outstanding Peraso Shares (on a Fully-Diluted basis) have entered into a Peraso Voting Agreements, in the form attached as Annex C, in connection with the Arrangement.

The Arrangement has also been unanimously approved by the MoSys Board, and stockholders representing approximately 0.6% of the outstanding shares of Common Stock have entered into a MoSys Voting Agreements, in the form attached as Annex D in connection with the Arrangement.

Does the MoSys Board support the Arrangement?

Yes. The MoSys Board unanimously recommends that the stockholders vote FOR:

In making its recommendation, the MoSys Board considered a number of factors as described in this proxy statement under the heading “The Arrangement — Reasons for the Arrangement.”

Why is MoSys proposing the Arrangement?

MoSys’ management believes that the Arrangement provides the current MoSys stockholders an opportunity to retain ownership of approximately 39% of the outstanding Combined Company Shares after the consummation of the Arrangement. See “The Arrangement — Reasons for the Arrangement.”

Do any of MoSys’ directors or executive officers have interests in the Arrangement that may differ from those of the MoSys stockholders?

Yes. Our directors and executive officers have interests in the Arrangement that are different from, or in addition to, the interests of the MoSys stockholders. See “The Arrangement — Interests of Certain Persons in the Arrangement.” The members of the MoSys Board were aware of and considered these interests, among other matters, in evaluating the Arrangement Agreement and the Arrangement and in recommending that the stockholders vote to approve the Arrangement Proposal.

Why am I being asked to vote on the issuance of the Consideration Shares?

At the Special Meeting, you will be asked to consider and vote upon the issuance of the Consideration Shares in connection with the Arrangement, under which MoSys will acquire all of the issued and outstanding Peraso Shares, including those Peraso Shares to be issued in connection with the conversion or exchange of the Peraso Convertible Debentures or Peraso Warrants, as applicable, at the Effective Time. Under the Arrangement, Peraso Shareholders will receive the Consideration Shares (which subject to adjustment as contemplated in the Arrangement Agreement and the Plan of Arrangement, will be comprised of 14,190,846 shares of Common Stock), prior to effecting any reverse stock split of shares of Common Stock as contemplated herein, including the shares of Common Stock that would be issuable upon exchange of the Exchangeable Shares, in each case based upon an illustrative Exchange Ratio, subject to certain assumptions, of 0.0512915979698675 shares of Common Stock for each outstanding Peraso Share calculated as of September 14, 2021, in exchange for their Peraso Shares. On completion of the Arrangement, Peraso will be a wholly-owned subsidiary of MoSys.

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Shares of Common Stock are listed on Nasdaq, and Rules 5635(a) and (b) of the Nasdaq Listing Rules require stockholder approval for the issuance of the Consideration Shares pursuant to the Arrangement. Rule 5635(a) of the Nasdaq Listing Rules requires stockholder approval if the number of shares of common stock to be issued in connection with the acquisition of another company will be equal to or in excess of 20% of the number of shares of common stock outstanding, and Rule 5635(b) requires stockholder approval of an issuance of securities that will result in a change of control.

Because the Consideration Shares issued pursuant to the Arrangement will exceed 20% of the issued and outstanding shares of Common Stock before the Closing of the Arrangement, and because the issuance of the Consideration Shares will result in the former Peraso Shareholders owning approximately 61% of the outstanding Combined Company Shares after the consummation of the Arrangement (on a Fully-Diluted basis), which will constitute a change of control of MoSys under the Nasdaq Listing Rules, stockholder approval of the issuance of the Consideration Shares in connection with the Arrangement is required, and the Arrangement will not be completed unless such approval is obtained. See “The Arrangement Agreement — Conditions for Completion of the Arrangement.”

Are there risks I should consider in connection with the Arrangement?

Yes. The material risks associated with the Arrangement are discussed under “Risk Factors — Risks Related to the Arrangement.” Those risks include, among others, the possibility that the Arrangement may not be completed, the possibility that the Peraso business will not be successful, that the Combined Company may fail to realize the anticipated benefits of the Arrangement.

What will holders of Peraso Shares receive under the Arrangement?

Under the terms of the Plan of Arrangement, (a) each Peraso Shareholder who is an Eligible Holder and not a Dissenting Shareholder may elect to (i) receive in respect of any or all of their Peraso Shares, the Exchangeable Share Consideration and (ii) receive in respect of the balance of their Peraso Shares, if any, the MoSys Share Consideration, and (b) each Peraso Shareholder who is not an Eligible Holder or a Dissenting Shareholder or fails to make an election is entitled to receive the MoSys Share Consideration. See “The Arrangement — Principal Steps of the Arrangement” and “Description of Exchangeable Shares and Related Agreements.”

What percentage of the Combined Company will the stockholders of MoSys and shareholders of Peraso own?

The Plan of Arrangement provides that after the Effective Time, the former Peraso Shareholders will own approximately 61% of the outstanding Combined Company Shares (including Exchangeable Shares that are exchangeable for shares of Common Stock), based on the number of shares of Common Stock outstanding as of immediately prior to the Effective Time (on a Fully-Diluted basis), with the legacy MoSys stockholders owning approximately 39% of the outstanding Combined Company Shares (on a Fully-Diluted basis). The Arrangement Agreement also provides that Peraso Options that are exercisable for Peraso Shares will become replaced with MoSys Replacement Options exercisable for shares of Common Stock after the Effective Time, in each case with adjustments based on the Exchange Ratio. The exact number of Consideration Shares that will be issued pursuant to the Arrangement will be determined at the Effective Time in accordance with the Exchange Ratio.

What is the Exchange Ratio under the Arrangement?

The Exchange Ratio pursuant to which Peraso Shares will be exchanged for shares of Common Stock or Exchangeable Shares pursuant to the Arrangement is not fixed. Rather, it will be determined based on the number of shares of Common Stock and Peraso Shares outstanding immediately prior to the completion of the Arrangement, such that the holders of Peraso Shares immediately prior to the completion of the Arrangement will hold approximately 61% of the outstanding Combined Company Shares upon completion of the Arrangement (on a Fully-Diluted basis).

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In addition, to the extent any indebtedness of Peraso and/or MoSys exists at the Effective Time, the Exchange Ratio will be adjusted to reflect a one dollar deduction in equity value for every dollar of debt which exists at the Effective Time on the part of Peraso and/or MoSys, as applicable, in the event of declaration of dividends or other distributions prior to the Effective Time, and in some other customarily events (e.g., stock splits and stock dividends)

By way of example and subject to terms of the Arrangement Agreement, assuming a total pro forma equity value of $127,950,251:

(a) for every $1,000,000 of indebtedness incurred by Peraso (assuming no indebtedness on the part of MoSys), the Peraso Shareholders will be entitled to approximately 181,818 fewer MoSys Shares at the Effective Time (i.e. the Peraso Shareholders will be entitled to an aggregate of approximately 14,009,028 MoSys Shares, representing approximately 60.22% of the total pro forma number of MoSys Shares on a Fully-Diluted basis to be outstanding upon completion of the Arrangement); and

(b) for every $1,000,000 of indebtedness incurred by MoSys (assuming no indebtedness on the part of Peraso), the Peraso Shareholders will be entitled to approximately 290,198 more MoSys Shares at the Effective Time (i.e. the Peraso Shareholders will be entitled to an aggregate of approximately 14,481,044 MoSys Shares, representing approximately 62.25% of the total pro forma number of MoSys Shares on a Fully-Diluted basis to be outstanding upon completion of the Arrangement).

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PRO FORMA EXCHANGE RATIO CALCULATION

Pro Forma Ownership Split Calculation

How was the Exchange Ratio determined?

The Exchange Ratio was determined after considerable negotiations between MoSys and Peraso and the contemplation of numerous factors that each company deemed relevant. In addition, Peraso received the Peraso Fairness Opinions, which provided that the Consideration to be received pursuant to the Plan of Arrangement is fair, from a financial point of view, to the Peraso Shareholders.

Why are Exchangeable Shares being offered to Canadian residents pursuant to the Arrangement?

The Exchangeable Shares provide an opportunity for certain Peraso Shareholders to make a tax election to defer Canadian income tax on any capital gain otherwise arising on the exchange of their Peraso Shares. Peraso Shareholders who are so eligible may elect to (a) receive Exchangeable Shares in respect of any or all of their Peraso Shares, and (b) receive shares of Common Stock in respect of the balance of their Peraso Shares, if any. Holders of Exchangeable Shares are able to exchange their Exchangeable Shares for shares of Common Stock in accordance with the Plan of Arrangement, as described under “Description of Exchangeable Shares and Related Agreements.”

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Holders of Exchangeable Shares will be entitled to cast votes on matters which holders of Combined Company Shares are entitled to vote pursuant to the Voting and Exchange Agency Agreement and will be entitled to receive dividends that are economically equivalent to the dividends declared by the Combined Company on the Combined Company Shares.

How will Peraso Options, Peraso Warrants, and Peraso Convertible Debentures be treated under the Arrangement?

Peraso Options

Under the terms of the Arrangement, Peraso Options that are not exercised prior to the Effective Time, whether vested or unvested, will be automatically exchanged for MoSys Replacement Options to purchase from MoSys the number of shares of Common Stock equal to the product of (a) the number of Peraso Shares issuable pursuant to the exercise of the Peraso Option immediately before the Effective Time, and (b) the Exchange Ratio, provided that if the foregoing would result in a fraction of a MoSys Share being issuable upon any particular exercise of MoSys Replacement Options, then the number of shares of Common Stock otherwise issuable upon exercise of such MoSys Replacement Options shall be rounded down to the nearest whole number of shares of Common Stock.

The exercise price per MoSys Share subject to any such MoSys Replacement Option will be an amount equal to the greater of: (i) the quotient of (A) the exercise price per Peraso Share under the exchanged Peraso Option immediately prior to the Effective Time, divided by (B) the Exchange Ratio, rounded up to the nearest whole cent, and (ii) such minimum amount that satisfies the requirements of paragraph 7(1.4)(c) of the ITA. Except as set out above, all terms and conditions of a MoSys Replacement Option, including the term to expiry, conditions to and manner of exercising, will be the same as the Peraso Option for which it was exchanged and any document evidencing a Peraso Option shall thereafter evidence and be deemed to evidence such MoSys Replacement Option.

Peraso Warrants

Each Peraso Warrant outstanding immediately prior to the Effective Time shall be deemed to be surrendered and transferred to Peraso in consideration for the issuance of Peraso Shares equal to the Peraso Warrant Consideration Amount, if any, provided that: (a) if the foregoing would result in the issuance of a fractional Peraso Share, then the number of Peraso Shares will be rounded down to the nearest whole number of Peraso Shares; and (b) nothing herein shall preclude a Peraso Warrant holder from exercising the Peraso Warrants in accordance with their terms at any time prior to the Effective Time. All Peraso Warrants so surrendered will be automatically cancelled with no further force and effect

Peraso Convertible Debentures

For each Peraso Convertible Debenture outstanding immediately prior to the Effective Time, all principal and accrued but unpaid interest thereon will be converted into Peraso Shares at the conversion price set out in such Peraso Convertible Debenture pursuant to the Plan of Arrangement, provided that if the foregoing would result in the issuance of a fractional Peraso Share, then the number of Peraso Shares shall be rounded down to the nearest whole number of Peraso Shares.

See “The Arrangement — Principal Steps of the Arrangement.”

What will be the effects of the amendments to MoSys’ Certificate of Incorporation?

The proposed Arrangement in general and the Stock-Split proposal in particular will have the following effects:

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Who will manage the Combined Company following the Arrangement?

Unless otherwise agreed by the Parties, at the Effective Time, all members of the Combined Company’s board of directors other than Daniel Lewis and Robert Newell will resign, and the Combined Company’s board of directors will be reconstituted such that one (1) of the initial post-Closing directors will be the Combined Company’s Chief Executive Officer, and two (2) initial post-Closing directors, who are independent in accordance with Nasdaq requirements, will be selected by Peraso. It is currently anticipated that, following the Effective Time, the Combined Company board of directors will be constituted as follows, with the two (2) initial post-Closing Directors to still be selected by Peraso:

In addition, all executive officers of MoSys will resign from their offices currently held, except with respect to James Sullivan as Chief Financial Officer and Daniel Lewis as President, and the executive officers of MoSys shall consist of the following:

For more information, see “The Arrangement Agreement — Board of Directors and Officers” and “Information about Peraso — Composition of the Board of Directors Following the Effective Time.”

When do MoSys and Peraso expect to complete the Arrangement?

Subject to obtaining Court and other requisite approvals as well as the satisfaction of all other conditions precedent to the completion of the Arrangement, it is anticipated that the Arrangement will be completed on or about November 29, 2021, subject to the receipt of any required regulatory approvals and the satisfaction of all other conditions to Closing set forth in the Arrangement Agreement.

What will happen if the Arrangement is not completed for any reason?

If the Arrangement is not completed for any reason by the Outside Date, the Arrangement Agreement may be terminated. If this occurs, MoSys will continue to carry on its business operations in the normal course. See “Risk Factors — Risks Relating to the Arrangement.” In addition, if the Arrangement is terminated due to the failure to obtain stockholder approval by MoSys, MoSys will be obligated to remit a payment in the amount of $750,000 to Peraso. Further, the Termination Payment shall be payable by Peraso or MoSys under certain circumstances including the breach of non-solicitation covenants and other events of default. See “The Arrangement Agreement — Termination Payment Amount” and “The Arrangement Agreement — Supplementary Bridge Financing.”

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SUMMARY OF THE ARRANGEMENT

This summary is qualified in its entirety by the more detailed information appearing elsewhere in this proxy statement, including the Annexes which are incorporated into and form part of this proxy statement. Terms with initial capital letters in this summary are defined in the Glossary of Defined Terms immediately preceding this summary.

Parties

MoSys: MoSys, Inc., a corporation incorporated under the laws of the State of Delaware and listed for trading on Nasdaq. MoSys is a provider of semiconductor solutions that enable fast, intelligent data access for cloud, networking, security, test and video systems.

MoSys, Inc.

2309 Bering Drive

San Jose, California 95131

Telephone: 408- 418-7500

Callco: 2864552 Ontario Inc., an Ontario corporation, or Callco, is a newly formed, directly wholly-owned subsidiary of MoSys that was organized specifically for the purpose of completing the Arrangement. Callco has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and in connection with the Arrangement.

2864552 Ontario Inc.

c/o MoSys, Inc.

2309 Bering Drive

San Jose, California 95131

Telephone: 408- 418-7500

Canco: 2864555 Ontario Inc., an Ontario corporation, is a newly formed, directly wholly-owned subsidiary of MoSys that was organized specifically for the purpose of completing the Arrangement. Canco has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and in connection with the Arrangement.

2864555 Ontario Inc.

c/o MoSys, Inc.

2309 Bering Drive

San Jose, California 95131

Telephone: 408- 418-7500

Peraso: Peraso Technologies Inc., a private company incorporated under the laws of the Province of Ontario. Peraso is a fabless semiconductor company specializing in the development of mmwave semiconductor systems, primarily in the 60 GHz spectrum band for 802.11ad/ay compliant devices and in the 28/39 GHz spectrum bands for 5G compliant devices.

Peraso Technologies Inc.

144 Front Street West, Suite 685

Toronto, ON M5J 2L7

Telephone: 416-637-1048

Purpose and Description of the Arrangement

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 U.S. capital markets. Pursuant to the Arrangement Agreement, MoSys and

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Peraso will complete a business combination pursuant to which MoSys will indirectly acquire all of the Peraso Shares and will focus its business on the current business of Peraso while also continuing the legacy business of MoSys.

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

Following the Closing of the Arrangement, all members of the Combined Company’s board of directors other than Daniel Lewis and Robert Newell will resign, and the Combined Company’s board of directors will be reconstituted such that one (1) of the initial post-Closing directors will be the Combined Company’s Chief Executive Officer, and two (2) initial post-Closing directors will be selected by Peraso, who are independent in accordance with Nasdaq requirements. See “The Arrangement Agreement — Board of Directors and Officers.”

The Arrangement will not be completed, without the approval by the MoSys stockholders of the Arrangement Proposal and the Incentive Plan Proposal. The Stock-Split Proposal, however, is not contingent upon the approval of the Arrangement Proposal or the Incentive Proposal and may be effected by MoSys Board in the event the closing under the Arrangement Agreement does not occur.

Under the terms of the Plan of Arrangement, (a) each Peraso Shareholder who is an Eligible Holder and not a Dissenting Shareholder may elect to (i) receive in respect of any or all of their Peraso Shares, the Exchangeable Share Consideration and (ii) receive in respect of the balance of their Peraso Shares, if any, the MoSys Share Consideration, and (b) each Peraso Shareholder who is not an Eligible Holder or a Dissenting Shareholder or fails to make an election is entitled to receive the MoSys Share Consideration.

The Exchange Ratio pursuant to which Peraso Shares will be exchanged for shares of Common Stock or Exchangeable Shares pursuant to the Arrangement is not fixed, but will be determined in accordance with the Plan of Arrangement pursuant to the following formula:

((A / B) – C) / D

Where:

Based on the above formula, the Exchange Ratio will be determined based on the number of shares of Common Stock and Peraso Shares outstanding immediately prior to the completion of the Arrangement, such that the holders of Peraso Shares immediately prior to the completion of the Arrangement will hold approximately 61% of the outstanding Combined Company Shares upon completion of the Arrangement (on a Fully-Diluted basis).

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Pro Forma Exchange Ratio Calculation

Pro Forma Ownership Split Calculation

The foregoing is intended to be illustrative of the manner in which the Exchange Ratio will be determined; however, the actual Exchange Ratio could be higher or lower.

For more details about the purpose of the Arrangement, see “The Arrangement — Purpose and Description of the Arrangement,” and “The Arrangement Agreement.”

Background of the Arrangement

The provisions of the Arrangement Agreement are the result of arm’s length negotiations between representatives of MoSys and Peraso and their respective legal advisers.

For more information, see “The Arrangement — Background of the Arrangement.”

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Fairness Opinion

In connection with the Arrangement, the MoSys Board received a written opinion, dated September 13, 2021, from the MoSys Financial Adviser, which states that, as of such date, and subject to the assumptions, limitations and qualifications set out therein, the Arrangement is fair, from a financial point of view, to MoSys. The MoSys Board is entitled to rely on the Fairness Opinion in connection with its decision to approve the Arrangement. The full text of the Fairness Opinion, which sets forth certain assumptions made, matters considered and limitations on the review undertaken in connection with such opinion, is attached as Annex J to this proxy statement. MoSys stockholders are urged to, and should, read the Fairness Opinion in its entirety.

Subject to the terms of its engagement, the MoSys Financial Adviser has consented to the inclusion in this proxy statement of its Fairness Opinion in its entirety, together with the summary herein, and other information relating to the MoSys Financial Adviser and its Fairness Opinion. The Fairness Opinion addresses only the fairness of the Arrangement from a financial point of view to MoSys and does not and should not be construed as a valuation of MoSys or Peraso or their respective assets, liabilities or securities or as recommendations to any MoSys stockholders as to how to vote at the Special Meeting.

For more information, see “The Arrangement — Fairness Opinion of the MoSys Financial Adviser.”

Reasons for the Arrangement

In considering its decision to approve the Arrangement Agreement and to authorize and approve the Arrangement and, subject to the terms and conditions of the Arrangement Agreement, to recommend the approval of the Arrangement Proposal, the Stock-Split Proposal, the Incentive Plan Proposal, and the Adjournment Proposal by MoSys’ stockholders, the MoSys Board consulted with MoSys’ management, as well as MoSys’ legal and financial advisers, and considered the terms of the proposed Arrangement Agreement, the Arrangement and the other transactions set forth in the Arrangement Agreement, as well as other alternative transactions.

See “The Arrangement — Reasons for the Arrangement.”

Recommendation of the MoSys Board

After careful consideration of, among other things, the Fairness Opinion, and consultation with its financial and legal advisers, the MoSys Board has unanimously determined that the Arrangement is in the best interests of MoSys and that the Arrangement is fair and reasonable to the MoSys stockholders. Accordingly, the MoSys Board has determined UNANIMOUSLY to recommend to the MoSys stockholders that they vote FOR the Arrangement Proposal, the Stock-Split Proposal, the Incentive Plan Proposal, and the Adjournment Proposal. See “The Arrangement — Recommendation of the MoSys Board.”

Principal Steps of the Arrangement

The following description is qualified in its entirety by reference to the full text of the Plan of Arrangement, a copy of which is attached hereto as Annex B. Commencing at the Effective Time on the Effective Date, subject to the terms and conditions of the Arrangement Agreement, the following shall occur as part of the Arrangement and shall be deemed to occur in the following order (except that the steps in (d) to (e) shall be deemed to occur simultaneously) without any further act or formality:

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In no event shall any fractional shares of Common Stock or Exchangeable Shares be issued under the Plan of Arrangement. Where the aggregate number of shares of Common Stock or Exchangeable Shares to be issued to a Peraso Securityholder would result in a fraction of a share of Common Stock or Exchangeable Share being issuable, then the number of shares of Common Stock or Exchangeable Shares to be issued to a Peraso Shareholder shall be rounded down to the nearest whole number without payment in respect of such fractional share.

See “The Arrangement — Principal Steps of the Arrangement” and the Plan of Arrangement, a copy of which is attached as Annex B to this proxy statement.

Required Stockholder Approval for the Arrangement

Assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of Common Stock as of the Record Date is required to adopt the Stock-Split Proposal. Approval of the Arrangement Proposal, the Incentive Plan Proposal, and the Adjournment Proposal requires the affirmative vote of the holders of shares of Common Stock representing a majority of the votes cast by the holders of all of the shares of Common Stock present in person or represented by proxy and entitled to vote on such matter will be required for approval of this proposal.

The Arrangement will not be completed, without the approval by the MoSys stockholders of the Arrangement Proposal and the Incentive Plan Proposal. The Stock-Split Proposal, however, is not contingent upon the approval of the Arrangement Proposal or the Incentive Proposal and may be effected by MoSys Board in the event the closing under the Arrangement Agreement does not occur.

Voting Agreements

To the knowledge of MoSys, the MoSys Supporting Stockholders beneficially own, or exercise control or direction over, directly or indirectly, 51,220 shares of Common Stock representing approximately 0.6% of the issued and outstanding shares of Common Stock as of the Record Date, on a non-diluted basis.

On September 14, 2021, the MoSys Supporting Stockholders entered into the MoSys Voting Agreement with Peraso pursuant to which, among other things, they agreed to cause to be counted as present for purposes of establishing quorum at the Special Meeting and to vote (or cause to be voted) the securities owned legally or beneficially by each of them or over which they exercise control or direction, as applicable, FOR matters related to the Arrangement, and to duly complete and cause forms of proxy in respect of all of the applicable securities held by them to be validly delivered to cause the applicable securities to be voted FOR matters related to the Arrangement.

The MoSys Voting Agreement automatically terminates if the Arrangement Agreement is terminated in accordance with its terms.

See “The Arrangement — Voting Agreement.”

Expenses of the Arrangement

Except as otherwise provided in the Arrangement Agreement, all out-of-pocket third party transaction expenses incurred in connection with the Arrangement Agreement and the Plan of Arrangement and the transactions contemplated thereunder, shall be paid by the party incurring such fees, costs, or expenses, whether or not the Arrangement is consummated.

See “The Arrangement — Expenses of the Arrangement.”

Court Approval of the Arrangement

An arrangement under the OBCA requires Court approval. Peraso will obtain the Interim Order, which provides for the calling and holding of the Peraso Meeting, the Dissent Rights, and other procedural matters.

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Subject to the terms of the Arrangement Agreement and receipt of approval of the Peraso Arrangement Resolution at the Peraso Meeting, Peraso intends to make an application to the Court for the Final Order. The application for the Final Order approving the Arrangement is expected to occur on within two (2) Business Days following the date of the Special Meeting, or as soon thereafter as counsel may be heard as the Court may direct. The Court will consider, among other things, the substantive and procedural fairness of the Arrangement to the parties affected, including Peraso Securityholders or other interested parties. The Court may approve the Arrangement in any manner the Court may direct, subject to compliance with any terms and conditions, if any, as the Court deems fit.

The Court will be advised that the Court’s approval of the Arrangement (including the fairness thereof), if granted, will form a basis for the exemption from the registration requirements of the Securities Act provided by Section 3(a)(10) thereof with respect to the issuance and distribution of the Consideration Shares to be issued by MoSys to Peraso Shareholders pursuant to the Arrangement and with respect to the issuance and distribution of the MoSys Replacement Options to be issued to pursuant to the Arrangement. Consequently, if the Final Order is granted, the securities issuable by MoSys to Peraso Securityholders including Consideration Shares issuable to Peraso Shareholders pursuant to the Arrangement and the MoSys Replacement Options issuable to Peraso optionholders pursuant to the Arrangement will not require registration under the Securities Act.

Assuming the Final Order is granted and the other conditions to closing contained in the Arrangement Agreement are satisfied or waived to the extent legally permissible, then Articles of Arrangement will be filed to give effect to the Arrangement.

See “The Arrangement — Court Approval of the Arrangement” and “The Arrangement — Completion of the Arrangement.”

The Arrangement Agreement

A description of certain provisions of the Arrangement Agreement is included in this proxy statement under the heading “The Arrangement Agreement.” The description is not comprehensive and is qualified in its entirety by the full text of the Arrangement Agreement, which is attached as Annex B.

See “The Arrangement Agreement.”

Completion of the Arrangement

Subject to the provisions of the Arrangement Agreement, the Arrangement will become effective at 12:01 a.m. (Toronto time) on the Effective Date. Completion of the Arrangement is anticipated to occur on or about November 29, 2021; however, it is possible that completion may be delayed beyond this date if the conditions to completion of the Arrangement cannot be met on a timely basis. After the Effective Date, Peraso will be an indirect subsidiary of MoSys.

The Arrangement is subject to a number of conditions in addition to the approval of the MoSys stockholders of the Arrangement Proposal and the Incentive Plan Proposal, including, among others, Court approval, approval of Nasdaq, and the approval of the Arrangement by the holders of Peraso Securities.

See “The Arrangement Agreement — Conditions for Completion of the Arrangement.”

Non-Solicitation of Acquisition Proposals

Each of MoSys and Peraso has agreed not to solicit alternative Acquisition Proposals until the Effective Time. MoSys and Peraso have also agreed to certain covenants and procedures for responding to an Acquisition Proposal that constitutes a Superior Proposal, including certain notice requirements and matching rights.

See “The Arrangement Agreement — Additional Covenants Regarding Non-Solicitation.”

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Termination of the Arrangement Agreement

Each of MoSys and Peraso can terminate the Arrangement Agreement under certain circumstances, including to enter into an alternative transaction that constitutes a Superior Proposal, provided that the terminating Party has complied with the covenants regarding non-solicitation, notices and matching rights. If the Arrangement Agreement is terminated under certain circumstances, Peraso or MoSys may be required to make the Termination Payment of $3.5 million to the other Party.

See “The Arrangement Agreement — Termination of Arrangement Agreement.”

Interests of Certain Persons in the Arrangement

You should be aware that members of the management and MoSys Board have interests in the Arrangement that may be in addition to or different from the interests of MoSys stockholders generally, which will present them with actual or potential conflicts of interest.

See “The Arrangement — Interests of Certain Persons in the Arrangement.”

Risk Factors

MoSys’ stockholders should carefully consider the risk factors relating to the Arrangement. Some of these risks include, but are not limited to the possibility that the Arrangement may not be completed; the possibility that the Peraso business will not be successful; that the Combined Company may fail to realize the anticipated benefits of the Arrangement.

For more information, see “Risk Factors.”

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RISK FACTORS

In evaluating the Arrangement, MoSys stockholders should carefully consider the following risk factors relating to the Arrangement and the Combined Company. The following risk factors are not a definitive list of all risk factors associated with the Arrangement and the Combined Company. Additional risks and uncertainties, including those currently unknown or considered immaterial by MoSys, may also adversely affect the shares of Common Stock, and/or the business of the Combined Company following the Arrangement.

Risks Related to the Arrangement

The Arrangement may not be completed due to failure to obtain the necessary court and/or regulatory approvals.

To complete the Arrangement, each of Peraso and MoSys must make certain filings with and obtain certain consents and approvals from various governmental and regulatory authorities including the Court, and the approval of Nasdaq of the listing of the shares of Common Stock to be issued pursuant to the Arrangement. Peraso and MoSys have not yet obtained these approvals, all of which are required to complete the Arrangement. The regulatory approval processes may take a lengthy period of time to complete which could delay completion of the Arrangement. The approval processes, including the undertakings and conditions that may be required for approval or whether the court and regulatory approvals, may not be obtained.

Uncertainty surrounding the Arrangement could adversely affect MoSys’ retention of customers, strategic partners and personnel and could negatively impact MoSys’ future business and operations.

Because the Arrangement is dependent upon satisfaction of certain conditions, its completion is subject to uncertainty. In response to this uncertainty, MoSys’ customers and strategic partners may delay or defer decisions concerning MoSys. Any delay or deferral of those decisions by customers and strategic partners could have a material adverse effect on the business and operations of MoSys, regardless of whether the Arrangement is ultimately completed.

The Parties could fail to complete the Arrangement or the Arrangement may be completed on different terms.

The Arrangement may not be completed as there are certain conditions that are outside the control of Peraso and MoSys, or if completed, that the Arrangement will be completed on the same or similar terms to those set out in the Arrangement Agreement. The completion of the Arrangement is subject to the satisfaction of a number of conditions which include, among others, (a) obtaining necessary approvals of securityholders of Peraso and MoSys, (b) grant of the Interim Order and the Final Order; and (c) performance by Peraso and MoSys of their respective obligations and covenants in the Arrangement Agreement. There can be no assurance that these conditions will be satisfied or, if satisfied, when they will be satisfied.

In addition, each of Peraso and MoSys has the right to terminate the Arrangement Agreement in certain circumstances. Accordingly, there is no certainty that the Arrangement Agreement will not be terminated by either Peraso or MoSys before the completion of the Arrangement. For example, MoSys has the right, in certain circumstances, to terminate the Arrangement Agreement if changes occur that, in the aggregate, have a Peraso Material Adverse Effect. Although a Peraso Material Adverse Effect excludes certain events that are beyond the control of Peraso and MoSys, there is no assurance that a change having a Peraso Material Adverse Effect on Peraso will not occur before the Effective Date, in which case MoSys could elect to terminate the Arrangement Agreement and the Arrangement would not proceed. In addition, if the Arrangement is not completed by Outside Date, Peraso or MoSys may choose to terminate the Arrangement Agreement in accordance with its terms.

If the Arrangement is not completed, the ongoing business of MoSys may be adversely affected as a result of the costs (including opportunity costs) incurred in respect of pursuing the Arrangement, and MoSys could

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experience negative reactions from the financial markets, which could cause a decrease in the market price of the shares of Common Stock, particularly if the market price reflects market assumptions that the Arrangement will be completed or completed on certain terms. MoSys may also experience negative reactions from its partners and there could be a negative impact on MoSys’ ability to attract future acquisition opportunities. Failure to complete the Arrangement or a change in the terms of the Arrangement could each have a material adverse effect on MoSys’ business, financial condition and results of operations.

If the Arrangement is not completed and the MoSys Board decides to seek another merger or business combination, it may not be able to find a party willing to engage in a transaction that is equivalent to, or more attractive than, the Arrangement. In addition, in certain circumstances, MoSys may be required to pay the Termination Payment to Peraso.

The Termination Payment, if triggered, may discourage other parties from attempting to acquire MoSys.

Under the Arrangement Agreement, MoSys is required to pay a Termination Payment of $3.5 million to Peraso in the event the Arrangement Agreement is terminated in certain circumstances (see “The Arrangement Agreement — Termination Payment”). The Termination Payment may discourage other parties from attempting to acquire the engage in a transaction with MoSys or otherwise making an Acquisition Proposal, even if those parties would otherwise be willing to offer greater value to the MoSys stockholder than that offered by Peraso under the Arrangement.

MoSys has and will continue to incur substantial transaction-related costs in connection with the Arrangement even if the Arrangement is not completed.

Certain costs related to the Arrangement, such as legal, accounting and certain financial adviser fees have been and will be incurred by MoSys even if the Arrangement is not completed, and some of such costs may be unanticipated or underestimated by MoSys’ management. Also, if the Arrangement is not completed, MoSys may be required to pay the Termination Payment to Peraso in certain circumstances. In addition, if the Arrangement is terminated due to the payment due to the failure to obtain a stockholder approval by MoSys, MoSys will be obligated to remit a payment in the amount of $750,000 to Peraso. Further, MoSys may be required to pay the Termination Payment to Peraso in certain circumstances, including the breach of non-solicitation covenants and other events of default. Such costs may offset any expected cost savings and other synergies from the Arrangement.

While the Arrangement is pending, MoSys is restricted from taking certain actions.

The Arrangement Agreement restricts MoSys from taking specified actions until the Arrangement is completed without the consent of Peraso, which may adversely affect the ability of MoSys to execute certain business strategies including, but not limited to, the ability in certain cases to issue, deliver, sell, pledge, lease, dispose of or encumber, or agree or offer to issue, deliver sell, pledge, lease, dispose of or encumber, any shares of Common Stock or securities of its subsidiaries, or any securities convertible or exchangeable thereto, or amend its securities arrangements entered prior to the Arrangement Agreement, amend or propose to amend its charter documents, declare or pay dividends, sell, pledge, lease, transfer, dispose of or encumber any assets, rights or properties of MoSys or its subsidiaries other than in ordinary course of business, enter acquisition agreements, make any material changes to MoSys’ business, enter into any joint venture, strategic alliance, partnership, or similar agreement, make any capital expenditures exceeding $100,000, etc. These restrictions may prevent MoSys from pursuing attractive business opportunities that may arise prior to the completion of the Arrangement. See Section 5.3 of the Arrangement Agreement to address the complete list of MoSys’ limitations in connection with the Arrangement Agreement.

The pending Arrangement may divert the attention of MoSys’ management.

The pending Arrangement could cause the attention of MoSys’ management to be diverted from the day-to-day operations. These disruptions could be exacerbated by a delay in the completion of the Arrangement

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and could have an adverse effect on the business, operating results or prospects of MoSys regardless of whether the Arrangement is ultimately completed.

Following the completion of the Arrangement, the Combined Company may issue additional securities.

Following the completion of the Arrangement, the Combined Company may issue additional securities (including equity securities) to finance its activities, including in order to finance acquisitions. If the Combined Company were to issue additional equity securities, the ownership interest of existing MoSys stockholders may be diluted and some or all of the Combined Company’s financial measures on a per share basis could be reduced. Moreover, as the Combined Company’s intention to issue additional equity securities becomes publicly known, the Combined Company’s share price may be materially adversely affected.

Although an application has been filed to list the Common Stock on Nasdaq, there can be no assurance that the common stock will be so listed or, if listed, that the Combined Company will be able to comply with the continued listing standards.

Nasdaq has determined (or will determine) that the proposed transaction constitutes a business combination that results in a change of control pursuant to its listing rules. Accordingly, the Combined Company will be required to satisfy all of Nasdaq’s initial listing criteria and to complete Nasdaq’s initial listing process in order for the Common Stock to be listed on Nasdaq. An application to list the Common Stock on Nasdaq upon consummation of the Arrangement has been filed as required by Nasdaq. MoSys is currently in compliance with the continued listing standards of Nasdaq.

Nasdaq’s approval of the listing application is a condition to the closing of the Arrangement and while Peraso and MoSys can each terminate the Arrangement Agreement if the condition is not satisfied, the parties can also each choose to waive the condition and consummate the Arrangement without Nasdaq’s approval of the listing application. If the parties waive that condition and consummate the Arrangement without Nasdaq’s approval of the listing application, the Combined Company would not be listed on Nasdaq.

In addition, if, after listing, Nasdaq delists the Common Stock from trading on its exchange for failure to meet the continued listing standards, the Combined Company and its stockholders could face significant material adverse consequences including:

MoSys’ directors and executive officers have interests in the Arrangement that may be different from, or in addition to, the interests of Peraso stockholders and MoSys stockholders.

Certain of the directors and executive officers of Peraso and certain of the directors and executive officers of MoSys negotiated the terms of the Arrangement Agreement and these individuals have interests in the Arrangement that may be different from, or in addition to, those of Peraso stockholders and MoSys stockholders, respectively. These interests include, but are not limited to, the continued service of certain of these Peraso individuals as directors and executive officers of MoSys after the date of the consummation of the Arrangement, certain other compensation arrangements with the MoSys directors and executive officers, and provisions in the Arrangement Agreement regarding continued indemnification of and advancement of expenses of the directors and executive officers of Peraso and MoSys. Peraso stockholders and MoSys stockholders should be aware of these interests when they consider their respective Boards of Directors’ recommendations that they vote in favor of the Arrangement-related proposals.

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The members of the MoSys Board were aware of and considered these interests relating to the Combined Company, among other matters, in evaluating the Arrangement Agreement and the Arrangement, and in recommending the approval of the Arrangement. The interests of MoSys directors and executive officers are described under “The Arrangement — Interests of Certain Persons in the Arrangement.”

Following the Closing, the composition of the board of directors and management of the Combined Company will be comprised of the certain directors of the current board of directors and management of MoSys and directors appointed pursuant to the Arrangement, which may affect the strategy and operations of the Combined Company.

Following the Closing of the Arrangement, all members of the Combined Company’s board of directors other than Daniel Lewis and Robert Newell will resign, and the Combined Company’s board of directors will be reconstituted such that two (2) of the initial post-Effective Time directors will be designated by Peraso, which directors will be independent in accordance with Nasdaq requirements, and one of the initial post-Effective Time directors will be the Combined Company’s Chief Executive Officer.

This composition of the Combined Company’s board of directors may affect the Combined Company’s business strategy and operating decisions following the consummation of the Arrangement, as compared to the MoSys Board prior to the Arrangement. In addition, immediately following completion of the Arrangement and the issuance of the Consideration Shares to the Peraso stockholders at the Effective Time, MoSys’ current stockholders in the aggregate will not have a majority ownership and voting interest in the Combined Company, which may result in MoSys stockholders having less influence on the Combined Company’s management and policies. Immediately following completion of the Closing, MoSys’ stockholders and Peraso’s stockholders are expected to own 39% and 61%, respectively, of the Combined Company’s outstanding shares (on a Fully-Diluted basis). As a result, current MoSys stockholders may have less influence on the Combined Company’s management and policies than they currently have.

The opinions of Peraso’s and MoSys’ financial advisers do not reflect changes in circumstances that may have occurred or that may occur between the signing of the Arrangement Agreement and Closing.

The opinion rendered to the Peraso Board by the Peraso Financial Adviser, and the opinion rendered to the MoSys Board by the MoSys Financial Adviser, were provided in connection with, and at the time of, the Peraso and MoSys Boards’ respective evaluations of the Arrangement. These opinions were based on the respective financial analyses performed, which considered market and other conditions then in effect, and financial forecasts and other information made available to them, as of the date of their respective opinions, which may have changed, or may change, after the date of the opinions. Changes in the operations and prospects of Peraso or MoSys, general market and economic conditions and other factors that may be beyond the control of Peraso or MoSys, and which changes were not taken into account by Peraso’s and MoSys’ financial advisers in rendering their respective opinions, may significantly alter the value of Peraso or MoSys or the price of MoSys Shares or value of Peraso Shares by the time the Arrangement is consummated. The opinions do not speak as of the time the Arrangement will be consummated or as of any date other than the date of such opinions.

Because there are no plans for Peraso’s and MoSys’ financial advisers to update their opinions, the opinions do not address the fairness of the Exchange Ratio or the Consideration Shares, as applicable, from a financial point of view, at any time other than the time such opinions were issued, even though the MoSys Board’s recommendation that MoSys stockholders vote “FOR” the MoSys Proposals are made as of the date of this proxy statement.

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Risks Related to the Combined Company

Combining the two companies may be more difficult, costly or time consuming than expected, and MoSys may not realize all of the anticipated benefits of the Arrangement.

Peraso and MoSys have operated and, until the consummation of the Arrangement, will continue to operate, independently. The success of the Arrangement will depend on, among other things, the Combined Company’s ability to integrate the businesses of Peraso and MoSys in a timely fashion. Additionally, the Combined Company may not be able to successfully achieve the level of cost savings, revenue enhancements and synergies that it expects. If the Combined Company is not able to successfully achieve these objectives, the anticipated benefits of the Arrangement may not be realized fully or at all or may take longer to realize than expected. In addition, failure to successfully integrate the businesses in the expected timeframe may adversely affect the Combined Company’s business, financial condition, results of operations or cash flows. In addition, the combined operation of two businesses may be a complex, costly and time-consuming process. The difficulties of combining the operations of the companies include, inter alia:

Many of these factors are outside the control of MoSys, and any one of them could result in increased costs, decreased expected revenues and diversion of management time and energy, which could materially impact the business, financial condition, results of operations and cash flows of the Combined Company. These factors could cause dilution to the earnings per share of the Combined Company, decrease or delay the expected benefits of the Arrangement and negatively impact the price of Common Stock. As a result, it cannot be assured that the Combined Company will realize the full benefits anticipated from the Arrangement within the anticipated time frames, or at all.

Even if the Arrangement is successfully consummated and the businesses integrated, there can be no assurance that the Arrangement will result in the realization of the full benefit of the anticipated synergies and cost savings or that these benefits will be realized within the expected time frames or at all. Difficulties in integrating the businesses could harm the reputation of the Combined Company. In addition, by engaging in the Arrangement, MoSys and Peraso may forego or delay the pursuit of other opportunities that may have proven to have greater commercial potential.

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The Combined Company’s inability to raise additional financing would limit its growth and may have a material adverse effect upon future profitability.

The Combined Company may require additional funding, likely through equity or debt financing, in order to execute its business plan. The Combined Company’s inability to raise financing in the future would limit its growth and may have a material adverse effect upon future profitability.

If additional funds are raised through further issuances of equity or convertible debt securities, holders of Combined Company Shares could suffer significant dilution. Any debt financing secured in the future could involve restrictive covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for the Combined Company to obtain additional capital and to pursue business opportunities, including potential acquisitions.

The Combined Company may need additional financing, which may dilute its stockholders.

In order to execute its business plan, the Combined Company may require additional funding in the form of debt or equity financing. If additional funds are raised through further issuances of equity or debt, the Combined Company’s stockholders could suffer significant dilution. Any debt financing secured in the future could involve restrictive covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for the Combined Company to obtain additional capital and to pursue business opportunities, including potential acquisitions.

The Combined Company’s market development efforts may be unsuccessful, any failure of which may materially affect the Combined Company’s business.

Although the Combined Company is committed to researching and developing new markets and products and improving existing products, there can be no assurances that such research and market development activities will prove profitable or that the resulting markets and/or products, if any, will be commercially viable or successfully produced and marketed.

A failure in the demand for products to materialize as a result of competition, technological changes or other factors could have a material adverse effect on the business, results of operations, and financial condition of the companies in which Peraso has or will invest in, and consequently, on the Combined Company.

The Combined Company will incur significant costs, and the Combined Company’s management will expel a significant amount of energy and resources, to maintain the Combined Company’s Nasdaq listing, which may detract from the Combined Company from furthering its other business objectives.

As a public company, there are costs associated with legal, accounting, and other expenses related to regulatory compliance. Securities legislation and the rules and policies of the SEC require listed companies to, among other things, adopt corporate governance and related practices, and to continuously prepare and disclose material information, all of which add to a company’s legal and financial compliance costs. The Combined Company may also elect to devote greater resources than it otherwise would have on communication and other activities typically considered important by publicly traded companies.

The Combined Company’s success relies heavily on its management, the loss of any of whom may have a material adverse effect on the Combined Company’s business.

The success of the Combined Company is dependent upon the ability, expertise, judgment, discretion, and good faith of the senior management of the Combined Company. Any loss of the services of such individuals could have a material adverse effect on the Combined Company’s business, operating results, or financial condition.

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There may not be an active market for the Combined Company Shares, which may adversely affect the price of the Combined Company Shares.

An active and liquid market for the Combined Company Shares may not be developed or maintained following the completion of the Arrangement will develop or be maintained and an investor may find it difficult to resell any securities of the Combined Company. In addition, there can be no assurance that the publicly-traded price of the Combined Company shares following the completion of the Arrangement will be high enough to create a positive return for investors. Further, there can be no assurance that the Combined Company shares will be sufficiently liquid so as to permit investors to sell their position in the Combined Company without adversely affecting the stock price. In such event, the probability of resale of the Combined Company Shares would be diminished.

The Combined Company shares may be subject to substantial price volatility which may have a negative effect on the value of such shares.

In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continuing fluctuations in price will not occur. It may be anticipated that any quoted market for the Combined Company Shares will be subject to market trends generally, notwithstanding any potential success of the Combined Company in creating revenues, cash flows, or earnings. The value of the Combined Company Shares will be affected by such volatility.

It is not anticipated that the Combined Company will pay any dividends.

Peraso has not paid dividends in the past, and it is not anticipated that the Combined Company will pay any dividends in the foreseeable future. Dividends paid by the Combined Company would be subject to tax and, potentially, withholdings.

The Combined Company will be required to maintain insurance coverage to cover certain risks associated with the Combined Company’s business, the total coverage of which may not be sufficient to cover all claims and losses that the Combined Company becomes subject to.

The Combined Company will require insurance coverage for a number of risks. Although the management of the Combined Company believes that the events and amounts of liability covered by its insurance policies will be reasonable, taking into account the risks relevant to its business, and the fact that agreements with customers contain limitations of liability, there can be no assurance that such coverage will be available or sufficient to cover claims to which the Combined Company may become subject. If insurance coverage is unavailable or insufficient to cover any such claims, the Combined Company’s financial resources, results of operations and prospects could be adversely affected.

The Combined Company might be involved in litigation claims and legal proceedings.

The Combined Company may become party to litigation from time to time in the ordinary course of business which could adversely affect its business. Should any litigation in which the Combined Company becomes involved be determined against the Combined Company, such a decision could adversely affect the Combined Company’s ability to continue operating and the market price for its shares and could use significant resources. Even if the Combined Company is involved in litigation and wins, litigation can redirect significant resources.

Certain directors and officers of the Combined Company may have conflicts of interest that are unfavorable to the Combined Company.

Certain of the Combined Company’s directors and officers are, and may continue to be, involved in other business ventures through their direct and indirect participation in corporations, partnerships, joint ventures, etc.

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that may become potential competitors of the technologies, products and services the Combined Company intends to provide. Situations may arise in connection with potential acquisitions or opportunities where the other interests of these directors and officers conflict with or diverge from the Combined Company’s interests. In accordance with applicable corporate law, directors who have a material interest in or who are a party to a material contract or a proposed material contract with the Combined Company are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, the directors and officers are required to act honestly and in good faith with a view to the Combined Company’s best interests. However, in conflict of interest situations, the Combined Company’s directors and officers may owe the same duty to another company and will need to balance their competing interests with their duties to the Combined Company. Circumstances (including with respect to future corporate opportunities) may arise that may be resolved in a manner that is unfavorable to the Combined Company.

Risks Related to MoSys

MoSys is, and to a certain extent after the Arrangement, will continue to be, subject to many of the risks described in Part I, Item 1A, “Risk Factors” in MoSys’ Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 18, 2021 and subsequent filings with the SEC, in each case, which are incorporated by reference into this proxy statement.

Risks Related to Peraso

Peraso has a history of losses and Peraso will be required to raise additional capital in the future.

Peraso recorded a net loss of approximately $9.6 million for the six months ended June 30, 2021 and ended the period with an accumulated deficit of approximately $115.8 million. Peraso recorded a net loss of approximately $10.2 million for the year ended December 31, 2020. These and prior fiscal year losses have resulted in significant negative cash flows and have required Peraso to raise substantial amounts of additional capital during this period. To remain competitive and expand its product offerings to customers, Peraso will be required to increase revenues substantially beyond levels that Peraso has attained in the past. Peraso must be able to generate sustainable operating profit and sufficient cash flow to continue its operations without raising additional capital. Given its history of fluctuating revenues and operating losses, and the challenges Peraso faces in securing customers for its products, Peraso cannot be certain that it will be able to achieve and maintain profitability on either a quarterly or annual basis. As a result, Peraso may be required to raise additional capital in the future, which can potentially not be available or only be offered with unfavorable terms.

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

Peraso intends to continue spending to grow its business. Peraso may still be required to obtain additional financing to pursue its business strategy, develop new products, respond to competition and market opportunities and acquire complementary businesses or technologies. There can be no assurance that such additional capital, whether in the form of debt or equity financing, will be sufficient or available and, if available, that such capital will be offered on appropriate terms and conditions.

If Peraso were to raise additional capital through sales of securities, its stockholders would suffer dilution of their equity ownership. If Peraso engages in a subsequent debt financing, Peraso may be required to accept terms that restrict its ability to incur additional indebtedness, prohibit it from paying dividends, repurchasing its stock or making investments, and force it to maintain specified liquidity or other ratios, any of which could harm its business, operating results and financial condition. If Peraso is required to raise additional capital and cannot raise it on appropriate terms, Peraso may not be able to, among other things:

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Peraso’s failure to successfully market its products could seriously harm its ability to execute its business strategy and may force it to curtail its research and development (R&D) plans or existing operations.

Peraso’s success depends on the acceptance of its products by equipment suppliers. Peraso’s prospective customers may be unwilling to adopt its products due to the uncertainties and risks surrounding designing a new chip into their systems. In the past, Peraso has experienced reluctance by potential customers to adopt its technology. Thus, currently, Peraso is not able to predict whether it will be able to generate adequate profit from making and selling its products.

Peraso’s future revenue growth depends on its winning designs with existing and new customers, retaining current customers, and having those customers design Peraso’s solutions into their product offerings and successfully selling and marketing such products. If Peraso does not continue to win designs in the short term, its product revenue in the following years will not grow. In addition, Peraso may enter into alternative arrangements with customers which could have a negative effect on Peraso’s financial performance.

Peraso sells its products to original equipment manufacturer, or OEM, customers that include its chips in their products. Peraso’s technology is generally incorporated into products at the design stage, which Peraso refers to as a design win, and which Peraso defines as the point at which a customer has made a commitment to build a board against a fixed schematic for its system, this board will utilize its chips and the customer has purchased at least $25,000 of chips for pre-production purposes. As a result, Peraso’s future revenue depends on OEM customers designing chips into their products, and on those products being produced in volume and successfully commercialized. If Peraso fails to retain its current customers or convince its current or prospective customers to include its chips in their products and fails to achieve a consistent number of design wins, Peraso’s results of operations and business will be harmed. In addition, if a current or prospective customer designs a competitor’s offering into its product, it becomes significantly more difficult for Peraso to sell its chip solutions to that customer because changing suppliers involves significant cost, time, effort, and risk for the OEM. Peraso may also enter into alternative arrangements with some of its largest customers from time to time including licensing and manufacturing arrangements which have the potential of adversely impacting Peraso including its financial performance.

The design win process is generally a lengthy, expensive and competitive process, with no guarantee of revenue, and, if Peraso fails to generate sufficient revenue to offset expenses, its business and operating results will suffer.

Achieving a design win is typically a lengthy, expensive and competitive process as Peraso’s customers generally take a considerable amount of time to evaluate Peraso’s products. In the markets Peraso serves, the time from initial customer engagement to design win, to production volume shipments, can range from two to three years, with a lengthier process for new customers or markets. In order to win designs for a customer, Peraso is required to incur design and development costs, and dedicate substantial engineering resources. Notwithstanding the costs incurred to win designs for a customer, Peraso may still not be successful in the competitive selection process. In addition, even if Peraso does achieve a design win, it may not generate sufficient, or any, revenue to offset its development expenditures. Peraso’s customers have the option to decide whether or not to utilize Peraso’s solutions into production after initially designing its products in the

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specification. The customer can also make changes to its product after a design win has been awarded to Peraso, which will lead to additional costs for Peraso.

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

Peraso aims to use the most advanced manufacturing process technology appropriate for its solutions. As a result, Peraso periodically evaluates the benefits of migrating its solutions to other technologies in order to improve performance and reduce costs. These ongoing efforts to modify the manufacturing processes or redesign products from time to time may result in delays in product deliveries.

Because the manufacturing of integrated circuits is extremely complex, the process of qualifying a new foundry is a lengthy process and there can be no assurance that Peraso will be able to find and qualify replacement suppliers without materially adversely affecting its business, financial condition, results of operations and prospects for future growth. Peraso cannot provide assurance that it will maintain its relationship with its current foundry or develop relationships with new foundries.

Peraso’s failure to continue to develop new products and enhance its products on a timely basis could diminish its ability to attract and retain customers.

The existing and potential markets for Peraso’s products are characterized by ever-increasing performance requirements, evolving industry standards, rapid technological change and product obsolescence. These characteristics lead to periodic changes in customer requirements, shorter product life cycles and changes in industry demands and mandate new product introductions and enhancements to maintain customer engagements and design wins. In order to attain and maintain a significant position in the market, Peraso will be required to continue to enhance and evolve its products and the underlying proprietary technologies in anticipation of these market trends, utilizing a small engineering staff.

Peraso’s future performance depends on a number of factors, including its ability to:

The semiconductor industry is cyclical in nature and subject to periodic downturns, which can negatively affect revenue.

The semiconductor industry is cyclical and has experienced pronounced downturns for sustained periods of up to several years. To respond to any downturn, many semiconductor manufacturers and their customers will slow their R&D activities, cancel or delay new product developments, reduce their workforces and inventories and take a cautious approach to acquiring new equipment and technologies. As a result, Peraso’s business has been in the past and could be adversely affected in the future by an industry downturn which could negatively impact its future revenue and profitability. The cyclical nature of the semiconductor industry may also cause Peraso’s operating results to fluctuate significantly from year-to-year.

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Peraso’s revenue has been highly concentrated among a small number of customers, and its results of operations could be harmed if Peraso loses a key customer.

Peraso’s overall revenue has been highly concentrated, with a few customers accounting for a significant percentage of its total revenue. As a result of this revenue concentration, its results of operations could be adversely affected by the loss of a key customer, or substantial reduction in sales due to a key customer ceasing to use Peraso’s technology, or products or by a decline in the number of products that incorporate its technology that are sold by a single licensee or customer or by a small group of licensees or customers.

Peraso’s revenue concentration may also pose credit risks which could negatively affect cash flow and financial condition.

Peraso might also face credit risks associated with the concentration of its revenue among a small number of licensees and customers. Failure to collect receivables from any customer that represents a large percentage of receivables on a timely basis, or at all, could adversely affect Peraso’s cash flow or results of operations.

Peraso’s products must meet exact specifications and defects and failures may occur, which may cause customers to return or stop buying its products.

Peraso’s customers generally establish demanding specifications for quality, performance, and reliability that its products must meet. However, its products are highly complex and may contain defects and failures when they are first introduced, or as new versions are released. If defects and failures occur in Peraso’s products during the design phase or after, Peraso could experience lost revenues, increased costs, including warranty and customer support expenses and penalties for non-performance stipulated in customer purchase agreements, delays in or cancellations or rescheduling of orders or shipments, product returns or discounts, diversion of management resources or damage to its reputation and brand equity, and in some cases consequential damages, any of which would harm its operating results. In addition, delays in its ability to fill product orders as a result of quality control issues may negatively impact relationships with customers. Peraso cannot provide assurance that it will have sufficient resources to satisfy any asserted claims. Furthermore, any such defects, failures, or delays may be particularly damaging to it as Peraso attempts to establish its reputation as a reliable provider.

Inaccurate forecasts can adversely affect Peraso’s business provided that Peraso sells its products on a purchase order basis and relies on estimated forecasts of its customers’ needs.

Peraso sells its products pursuant to individual purchase orders rather than long-term purchase commitments. Therefore, Peraso will rely on estimated demand forecasts, based on input from its customers, to determine how much product to manufacture. Given that Peraso’s sales are based primarily on purchase orders, customers may cancel, delay or otherwise modify their purchase commitments with little or no notice. As such, Peraso will generally have limited visibility regarding its customers’ product needs. In addition, the product design cycle for networking OEMs is lengthy and it may be difficult for Peraso to accurately anticipate when it will commence commercial shipments of products that include its integrated circuits (“ICs”).

Furthermore, if Peraso experiences substantial warranty claims, its customers may cancel existing orders or cease to place future orders. Any cancellation, delay, or other modification in its customers’ orders could significantly reduce revenue, cause operating results to fluctuate from period to period and make it more difficult for Peraso to predict its revenue. In the event of a cancellation or reduction of the number of orders, Peraso may not have enough time to reduce operating expenses to mitigate the effect of the lost revenue on its business.

If Peraso overestimates customer demand for products, it may purchase products from its manufacturers that it cannot sell. Conversely, if Peraso underestimates customer demand or if sufficient manufacturing and testing capacity are unavailable, Peraso would forego revenue opportunities and could lose market share in the markets served by its products, as well as potentially incurring penalty payments under its customer purchase agreements.

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

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

As a fabless semiconductor company, Peraso relies on third parties for substantially all of its manufacturing operations. Peraso depends on third parties to supply material in a timely manner that meets Peraso’s standards for yield, cost, and quality. Peraso does not have long-term supply contracts with any of its suppliers or manufacturing service providers, and therefore, suppliers or manufacturing service providers are under no obligation to manufacture products during any specific period, in any specific quantity or at any specified price except as may be provided in a particular purchase order. Any issues encountered in the manufacturing supply chain could adversely impact Peraso’s ability to ship products to customers on time and in the quantity required. This can damage its customer relationships and impede market acceptance of its product solutions.

Peraso’s third-party wafer foundries and testing and assembly vendors are located in regions at high risk for earthquakes and other natural disasters. Any disruption to the operations of these foundries and vendors resulting from earthquakes or other natural disasters could cause significant delays in the development, production, shipment, and sales of Peraso’s products.

Peraso’s foundries and some other product suppliers are located in Asia. The risk of an earthquake in the Pacific Rim region is significant due to the proximity of major earthquake fault lines. The occurrence of earthquakes or other natural disasters could result in the disruption of the wafer foundry or assembly and test capacity of the third parties that supply these services and may impede R&D efforts as well as Peraso’s ability to market and sell its products. Peraso may not be able to obtain alternate capacity on favorable terms, if at all.

Peraso faces risks related to health epidemics which could adversely affect its operations and overall business.

Peraso’s business could be materially adversely affected by a widespread outbreak of a health pandemic. The effects of outbreaks could include disruptions or restrictions on employees’ ability to travel, and temporary closures of facilities of suppliers, customers, or other vendors in Peraso’s supply chain. This can impact Peraso’s interactions and relationships with customers, and third-party suppliers and contractors. In addition, a significant outbreak of contagious diseases as a result of a health pandemic could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could reduce the overall demand for Peraso’s products and impact Peraso’s results of operations.

Any claim that Peraso’s products or technology have infringed third-party intellectual property rights could increase costs of operations, distract management, or lease to the discontinuance of technology licensing or product offerings. In addition, Peraso may incur substantial litigation or settlements costs which would adversely affect its profitability.

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights or positions which has resulted in often protracted and expensive litigation. Peraso is not aware of any third-party intellectual property that its products or technology could potentially infringe. However, similar to many companies of its size with limited resources, Peraso has not searched for all potentially applicable intellectual property in the public databases. It is possible that a third-party now has, or may in the future obtain, patents or other intellectual property rights that its products or technology may now, or in the future, infringe. Peraso or its customer may, from time to time, receive notice of claims that Peraso has infringed patents or other intellectual property rights of others. Litigation against Peraso can result in significant expenses and divert the efforts of its technical and management personnel, regardless of whether the litigation has merit.

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The discovery of defects in technology and products could expose Peraso to liability for damages, which may not be covered by its insurance coverage.

The discovery of a defect in Peraso’s technologies and products could lead customers to seek damages. Many of Peraso’s agreements with customers include provisions waiving implied warranties regarding its technology and products and limiting its liability to its customers. Peraso cannot be certain, however, that the waivers or limitations of liability contained in its agreements with customers will be enforceable. In addition, Peraso’s insurance coverage has certain exclusions or may not adequately cover liabilities incurred. Peraso’s insurance providers may be unable or unwilling to pay a claim, and losses not covered by insurance could be large, which could harm Peraso’s financial condition.

Peraso may not be able to protect and enforce its intellectual property rights, including confidentiality and trade secrets, which could impair its ability to compete and reduce the value of its technology.

Peraso’s technology is complex and is intended for use in complex systems. Policing the unauthorized use of its intellectual property is difficult and expensive. Peraso cannot be certain that it will be able to detect unauthorized use of its technology or prevent other parties from designing and marketing unauthorized products based on its technology. In the event, Peraso identifies any past or present infringement of its patents, copyrights or trademarks, or any violation of its trade secrets, confidentiality procedures, or licensing agreements, Peraso cannot provide assurance that the steps taken by it to protect its proprietary information will be adequate to prevent misappropriation of its technology. Peraso’s inability to adequately protect its intellectual property would significantly reduce the barriers of entry for directly competing technologies and could reduce the value of its technology. Furthermore, Peraso might initiate claims or litigation against third parties for infringement of its proprietary rights or to establish the validity of its proprietary rights. Litigation commenced by Peraso could result in significant expense and divert the efforts of its technical and management personnel.

Peraso’s existing patents may not provide sufficient protection of intellectual property, and patent applications might not result in the issuance of patents, either of which could potentially reduce the value of its technology.

Peraso utilizes a combination of patents, trademarks, trade secret laws and confidentiality procedures to protect its intellectual property rights. Peraso cannot be sure that any patents will be issued from its pending applications or that any claims allowed from pending applications will be of sufficient scope or strength, or issued in all countries where its products can be sold, to provide protection or commercial advantage to Peraso.

If Peraso fails to retain key personnel, its business and growth could be negatively affected.

Peraso’s business has been dependent to a significant degree on the services of a small number of executives and technical employees. The loss of key personnel could negatively impact technology development efforts, ability to deliver products under existing agreements, maintain strategic relationships with partners and obtain new customers. Peraso generally has not entered into employment or non-competition agreements with any of its employees and does not maintain key-man life insurance on the lives of any of its key personnel.

Peraso may not be able to attract and retain qualified employees and its future success depends on the continued service of its executive officers and other key management and technical personnel, and on its ability to continue to identify, attract, retain and motivate them. The market for employees in Peraso’s industry is extremely competitive and a number of competitors for talent are significantly larger than Peraso and may be able to offer compensation in excess of what Peraso may be able to offer.

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

Peraso may experience disruptions    in its global semiconductor supply chain, with suppliers increasing lead times or placing products on allocation, including procuring necessary components,    wafers, substrates and

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assembly services in a timely fashion. As a result of these potential supply chain disruptions, Peraso may be required to increase customer order lead times and placed some products on allocation. Peraso may be unable to satisfy all of the demand for its products, which may adversely affect customer relationships and impact revenue.

Price increases from Peraso’s supply chain can adversely impact revenue or reduce margins.

Peraso’s suppliers can increase the price of products and services provided to Peraso. Finding and qualifying alternate or additional suppliers in response to increased pricing from suppliers can be a lengthy process and can lead to production delays or additional costs, and such alternatives are sometimes not available. If Peraso is unable to increase the price of its products to its customers in response to its increased costs, it may face reduced margins.

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INFORMATION ABOUT PERASO

Business Description

Peraso is a world leader in the development of 5G mmWave silicon and is one of the few semiconductor companies shipping mmwave devices in high volume. Its products enable a range of applications such as mmWave 5G with low latency and high reliability, as well as multi-gigabit mmWave links over 25km. Peraso also addresses consumer applications such as wireless video streaming and untethered AR/VR. Since 2008, Peraso has spent over $100M in the development of mmwave devices, with over 40 patents in mmwave systems and technology.

Company Overview

Peraso was incorporated on June 5, 2008 under the Business Corporations Act (Ontario). Peraso’s headquarters is in Toronto, Ontario, Canada, and, as of June 30, 2021, Peraso had 83 full-time equivalent employees and consultants. Peraso has a small R&D office in Waterloo, Ontario, Canada and sales representatives in California and Taiwan.

Peraso was founded on the principle that the demand for wireless communications is exponential. While communication engineers have been able to squeeze more bandwidth out of existing spectrum, Peraso believes that with 5G in the spectrum existing sub-6GHz, there is very little difference in terms of real performance from 4G/LTE. In fact, the “10X increase in performance, 10X reduction in latency” is provided by the mmWave spectrum, not the existing frequency bands. In other words, Peraso believes it is 5G mmWave that will provide users with a truly noticeable improvement in their network experience.

The underlying technology to enable mmWave communications is extremely complex, requiring several years of R&D experience, years of real field deployments and extensive financial commitment. Peraso, as a leader in the development and deployment of mmWave technology, has these attributes. Many companies have attempted to commercialize mmWave technology, but Peraso is one of the few that has been successful in this endeavor. Given that a significant segment of the 5G specification addresses mmWave technology, Peraso is poised to be a global leader in the field for decades to come.

Description of Business, Operational Overview and Business Objective

Peraso is a fabless semiconductor company with a focus on mmWave wireless technology. mmWave is generally described as the frequency band from 24 GHz to 300 GHz. There are two industry standards that incorporate mmWave technology for wireless communications: (1) IEEE 802.11ad/ay; and (2) 3GPP Release 15-17 (commonly referred to as 5G). Peraso has developed and continues to develop products that conform to these standards. The first product line from Peraso operated in the 60 GHz band and conformed to the IEEE 802.11ad standard. This product line included a baseband IC, several variations of mmWave radio frequency (RF) ICs, as well as associated antenna technology. The second product line is currently in development and addresses the 5G mmWave opportunity. Given Peraso’s extensive experience in the development of mmWave technology, 5G mmWave, is a logical adjacent market.

The first market that Peraso targeted was the 60GHz IEEE 802.11ad market. Peraso’s 60GHz IEEE 802.11ad products had two very important advantages over traditional 2.4GHz / 5GHz Wi-Fi products: very high data rates (up to 4.5 Gb/s) and low latency (less than 5ms).

The first application that had traction was outdoor broadband. This included applications such as point-to-point (“PtP”) backhaul links or fixed wireless access (“FWA”) using point-to-multipoint links (“PtMP”). Products using the 60GHz band are for this market. Since the spectrum is unlicensed (free), wireless carriers can provide services without having to spend significantly on wireless spectrum.

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Peraso is a leading supplier of semiconductors in the PtP and PtMP markets. Peraso is currently shipping to leading equipment suppliers in this space, as well as directly to service providers who are building their own equipment. Peraso brings key advantages to the market. First, Peraso’s products support the spectrum from 66 GHz to 71 GHz. These are often referred to as channels 5 and 6 in the 802.11ad/ay specifications. The key advantage in supporting these channels, is the signals are able to propagate much further than channels 1-4; this is a result of significantly lower oxygen absorption at frequencies above 66 GHz. Currently, Peraso customers have achieved links in the range of 25 kilometers, which is substantially longer than any 60 GHz links in the past.

In the indoor area, the 802.11ad technology is ideal for high speed, low latency video applications. In an indoor situation, Peraso products can support 3 Gb/s links with under 5ms of latency. Example applications include:

Peraso derives its revenue from selling semiconductor devices, as well as modules based on using those semiconductor devices.

Peraso’s business model of being a fabless semiconductor company is the same model as a company such as Qualcomm Incorporated (“Qualcomm”) or Nvidia Corporation. Peraso designs, markets, and supports its semiconductor products, but the manufacturing is outsourced to third parties, such as Taiwan Semiconductor Manufacturing Company, or TSMC, or Amkor Technology, Inc. Peraso has an entire semiconductor vendor infrastructure in place, including R&D, operations, sales, marketing, and administration. Target gross margins for the semiconductor business are in the range of 55% to 60% in volume production.

Operationally, Peraso is a world leader in the manufacturing of mmWave devices. Peraso has pioneered a high-volume mmWave production test methodology using standard low cost production test equipment. It has taken Peraso several years to refine performance of this production test methodology, and this has placed Peraso in a leadership position in addressing the operational challenges of delivering mmWave products into high-volume markets.

Peraso has recently augmented its business model by selling complete mmWave modules. The primary advantage provided by a module is the silicon and the antenna are integrated into a single device. A differentiating characteristic of mmWave technology is that the RF amplifiers must be as close as possible to the antenna to minimize loss. By providing a module, Peraso can guarantee the performance of amplifier/antenna interface which simplifies the RF design engineering, facilitating more opportunities for new companies that have not provided RF type systems as well as shortening the time to market for new products. It is possible for third parties to provide module products, but, because Peraso has world class mmWave antenna intellectual property, it can provide a highly competitive solution as it owns and produces the module components.

Overall Performance, Industry Trends and Economic Factors

Peraso was founded on the principle that the demand for wireless services is increasing exponentially, therefore, wireless users and service providers will be required to eventually utilize higher frequency spectrum to meet the demand. The 5G wireless industry is the best and latest example of how and why mmWave is the future of wireless networks. The 5G specification includes low, mid and mmWave frequencies. There is substantial hype around the 5G market, including such slogans as ‘10X the bandwidth’ and ‘10X reduction in latency’. In reality, only part of the 5G specification truly offers such improvement and this is the mmWave aspect.

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mmWave is not without challenges as mmWave signals do not typically travel as far as traditional wireless signals and are more attenuated by solid objects. Mitigation strategies must be deployed, in particular with regards to the management of signal propagation. Whereas traditional wireless devices utilize a broad, omni antenna pattern, mmWave systems rely on phased array technology, which focuses the radio signal into a narrow beam to improve propagation characteristics. Peraso is a global leader in implementing these sophisticated radio systems and is one of the few companies in the market that is successfully shipping phased array devices in mass production.

In terms of specific market opportunity, mmWave is a key differentiating update from 4G/LTE to 5G. Within the 5G market, there are several primary applications for mmWave. The initial target for Peraso is referred to as the FWA segment. In this market segment, carriers provide their customers with a fixed wireless link to a base station or small cell, thus providing the customer with high-speed access to the Internet. mmWave can provide download speeds of over 1 Gbps and upload speeds of several hundred megabits per second. mmWave is a much cheaper alternative to fiber and allows carriers an additional advantage and competitive weapon against other access technologies such as cable. Additionally, Peraso 5G mmWave RF modules can be utilized in other applications, including hotspots, laptops, and tablets.

5G mmWave has support from major industry players. Apple has incorporated mmWave wireless into all versions of the iPhone12 for sale in the US market. The basic premise is common, which is the ever-increasing demand for bandwidth. Verizon is the leading carrier in the US at deploying mmWave for both mobile and fixed wireless access. The use case for mobile initially is to provide their customer base (primarily iPhone12 customers) with continuity of network access in highly congested environments. Examples include sporting events, public beaches, music festivals or generally any large gathering with thousands of users are attempting to gain access the network simultaneously. Peraso believes that as early adopters, mmWave will gain universal acceptance, as users will demand full continuity in terms of network access.

Below are some early examples of carriers deploying mmWave technology:

Longer term, Peraso is expected to be well positioned to address the mobile opportunity for mmWave. This presents an order of magnitude increase in the total available market. However, this market opportunity is more competitive, and potential competitors include Qualcomm, Mediatek, and Samsung Electronics Co., Ltd.

Research and Product Development; Intellectual Property

Peraso has filed for 40 patents in the field of mmWave wireless to date and 35 patents have been granted. Peraso was also an active participant in the development of the IEEE 802.11ay specification and has been granted 9 essential claims patents with respect to this standard. Essential claims patents are of particular value as a specification cannot be implemented without violating the patents.

Additionally, Peraso has a competitive 12 years’ worth of technical know-how in the design and manufacturing of mmWave technology. The most important aspect of this knowledge is knowing how mmWave circuits will perform in a real-world environment. Traditionally, semiconductor design utilizes sophisticated

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CAD tools to simulate the performance of a device that is manufactured at a specific semiconductor manufacturing plant. However, mmWave is extremely difficult to model precisely. Therefore, the only path to understand how well a device will perform is to produce the device and test it in a real-world application. Over the last decade, many companies have attempted to develop mmWave semiconductor devices, however, given that the devices had inconsistent or weak performance, a significant number of them have gone out of business or abandoned their design efforts.

At a system level, there are additional technical challenges presented by mmWave that Peraso has overcome, and is part of the internal know-how of Peraso. For example, a key technology of mmWave is the concept of beamforming and beam-steering using a phased array antenna. This technology is utilized to concentrate the RF energy into a narrow beam to improve the range and coverage of mmWave devices. Peraso is a world leader in phased array circuits and antennas, and while there are many academic examples of successful phased array implementations, there is a vast barrier between a “laboratory” version of phased array technology and a version that is deployed for commercial use. One such aspect is the implementation of the beamforming procedure, which seeks to maximize throughput and do so while not impacting latency. While the details of achieving this are complex, it is important intellectual property that Peraso has gained through real world experience.

Covid-19 Impact

During the quarter ended March 31, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. This resulted in governments worldwide enacting emergency measures to combat the spread of the virus. In response to this, Peraso’s management implemented a “Work from Home” policy for management and employees in all locations, and further developed additional safety protocols to address the pandemic. A limited engineering and IT support staff are continuing to work on given tasks and are following strict safety guidelines.

Transactions with Related Parties

There are no transactions with any related parties impacting the Peraso Financial Statements, except with regard to Roadmap, its largest stockholder, which has two representatives on the Peraso Board. Peraso has paid fees to Roadmap associated with the issuance of convertible notes and related warrants.

Competition

mmWave circuit and system design is a highly specialized engineering skill, as well as a challenging technology to ship in mass production. At frequencies above 24 GHz, circuits are extremely vulnerable to small variances in the semiconductor manufacturing process. Designing circuits that minimize susceptibility to these variances takes years of practice, and Peraso is one of the few companies in the world that is skilled in mmWave design. Further, Peraso has shipped mmWave devices in high-volume, and ensuring all devices sold adhere to strict performance standards is a core competency Peraso has developed over the last 12 years.

In addition, Peraso has developed its own mmWave phased array antenna technology, which allows Peraso to be highly competitive in terms of overall system cost. There is no need to employ the services of third-party antenna suppliers, thus eliminating the additional cost for a third-party antenna.

IEEE 802.11ad/ay Market:

The primary competitor to Peraso in the IEEE802.11ad/ay market is Qualcomm. The primary benefit that Peraso provides to the market is the support of the higher frequency bands from 66 GHz to 71 GHz. At these frequencies, oxygen attenuation is significantly reduced, and signals can travel much further.

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Peraso also has key points of differentiation over Qualcomm for wireless video devices. Peraso, positioned uniquely in this market, has USB 3.0 built into its devices, so the products generally support USB architectures. A prime example is the replacement of the USB cable with a wireless version using Peraso technology. There are many applications where this can be of use, including USB web-cams, wireless displays, and AR/VR headsets. Peraso has invested significant software resources into providing the market with wireless USB solutions, and there is no other mmWave vendor in the world that can offer multi-gigabit solutions as a replacement for wired USB.

5G Market:

With 5G, Peraso’s efforts are focused on the mmWave RF front-end phased array component of the system. This is in contrast to the IEEE solution, in which Peraso provides a baseband device as well as an mmWave RF front-end phased array device. The 5G product instantiation is an RF module that embraces a broad swath of intellectual property that establishes a substantial moat to potential competitors. Key elements of intellectual property include:

From a competitive perspective, Peraso is currently the only pure play 5G vendor to offer a dual-band (28/39GHz) RF solution for the fixed wireless broadband (FWA) market. Qualcomm does offer a 5G RF solution for the FWA market, however their solution is based on aggregating their mobile RF solution, which requires several compromises in terms of cost, performance, and power consumption. With an initial focus on fixed wireless access, Peraso can derive advantages by optimizing its silicon for that specific market. Furthermore, Peraso has experienced initial success in the unlicensed, 60 GHz, FWA market, and believes it can transfer all of the knowledge gained from the 60 GHz market to the 5G market.

Employees and Human Capital

As of June 30, 2021, Peraso had 66 employees and 17 consultants, 67 of whom were engaged in R&D activities. None of Peraso’s employees are represented by a labor union or covered under a collective bargaining agreement.

Peraso’s human capital resource objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating Peraso’s existing and new employees, advisers, and consultants. The principal purposes of Peraso’s equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based awards, in order to increase stockholder value and the success of Peraso by motivating such individuals to perform to the best of their abilities and achieve its objectives.

The corporate headquarters of Peraso is located in Toronto, Ontario, Canada, and includes R&D space. The facility is leased, and the lease was renewed in December 2020 for approximately 27,000 square feet of space. The term of the lease is three years, with the term commencing on January 1, 2021 and ending on December 31, 2023. Peraso pays monthly base rent of CAD$27,517 and additional rent for its proportionate share of operating costs and property taxes of CAD$25,464 per month, subject to periodic adjustments.

Additional engineering lab space of 2,438 square feet is leased in Waterloo, Ontario, Canada, with an original lease term from September 15, 2016 through September 14, 2021, which has been extended an additional year on the same terms. The monthly basic rent is currently CAD$2,844 and it incurs additional fees for its

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proportionate share of operating costs and property taxes of CAD$2,772 per month, subject to periodic adjustments.

Peraso believes that its facilities are adequate for its current needs.

Legal Proceedings

As of the date of this proxy statement, there are no material legal proceedings, and no contemplated legal proceedings known to be material, to which Peraso is a party or of which any of Peraso or its respective property is the subject matter.

Dividends and Related Matters of Peraso

Peraso has never declared or paid any cash dividends. Peraso anticipates that the Combined Company will retain all of its future earnings to advance the development and commercialization of its products, and does not anticipate paying any cash dividends on the Combined Company Shares in the foreseeable future. Any future determination to declare cash dividends on the Combined Company Shares will be made at the discretion of the Combined Company’s board of directors, subject to applicable Law and contractual restrictions and will depend on its financial condition, results of operations, capital requirements, general business conditions and other factors that such Peraso Board may deem relevant.

Current Capitalization of Peraso

Peraso’s outstanding securities as of December 31, 2020 and as of June 30, 2021 are as follows:

Notes:

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Management’s Discussion and Analysis

Critical Accounting Policies and Estimates

The preparation of these financial statements in accordance with 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. Estimates are based on historical experience, where applicable, and on various other assumptions that are believed to be reasonable. Actual results could differ materially from those estimates and would impact future results of operations and cash flows. For more information about Peraso’s accounting policies and estimates, please refer to note 2 of the audited annual financial statements for the year ended December 31, 2020, which are attached as Annex L to this proxy statement.

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 eight 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 five years.

Leases

Effective January 1, 2019, Peraso adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 842, Leases (ASC 842). 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. Peraso adopted ASC 842 utilizing the modified retrospective transition method. Peraso elected the practical expedient afforded in ASC 842 in which Peraso did not reassess whether any contracts that existed prior to adoption have or contain leases or the classification of its 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.

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 Peraso recognizes lease expense for these leases as incurred over the lease term.

R&D

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

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Stock-Based Compensation

Peraso periodically issues Peraso Options to employees and non-employees. Peraso accounts for such grants based on ASC No. 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 Peraso 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.

Warrant Liability

From time to time, Peraso issues detachable warrants, including in connection with issuances of preferred shares and Peraso Convertible Debentures. The Peraso Warrants have exercise prices that are denominated in foreign currency (CAD) that differs from Peraso’s functional currency (USD) and accordingly, are accounted for as liabilities in accordance with ASC No. 815, derivatives and hedging. These Peraso 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.

Fair Value Measurements

Peraso applies ASC No. 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:

Peraso categorizes its cash as Level 1 fair value measurements. Peraso categorizes its warrant liability as a Level 3 fair value measurement. The warrant liability is measured at fair value on a recurring basis and is 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 Peraso Warrants are valued using the Black-Scholes model as discussed in the notes to the Peraso Financial Statements.

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.

Tax Credits and Receivables

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

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expenditures incurred in Canada. In addition, Peraso 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 SR&ED in Canada. As a part of the program, Peraso may be entitled to a receivable in the form of tax credits or incentives. Peraso records refundable tax credits as a receivable, when Peraso can reasonably estimate the amounts and it is more likely than not, they will be received.

Results of Operations for the Years Ended December 31, 2020 and 2019

Peraso recorded a net loss for the year ended December 31, 2020 of $10,226,861, as compared to a net loss of $17,969,524 for the year ended December 31, 2019.

The decrease in the loss of $7,742,663 in the years ended December 31, 2020 as compared to December 31, 2019 is primarily due to the following factors, and the material differences are discussed further below in this section:

Revenue

New revenue streams for the year ending December 31, 2020 were License Fee and Non-Recurring Engineering (“NRE”) revenue of $5,000,000 and $2,550,000, respectively, which accounted for the increase. The former was derived from a key customer account and the latter pertains to a NRE agreement with XCOM and Logitech.

Product revenue increased from $339,747 to $1,394,922 and the other revenue primarily evaluation kits increased from $166,252 in 2019 to $206,081 in 2020.

R&D, General & Administrative (“G&A”) and Sales & Marketing (“S&M”) Expenses

An approximately $2.7 million decrease in the R&D expense was due to decreased headcount-related expenses. Due to a considerably lower headcount in G&A when compared to other functions, a headcount related decrease of approximately $350,000 was offset by an increase of $3,292,424 in the legal fees, primarily related to litigation, Companies’ Creditors Arrangement Act (“CCAA”) proceedings and capital restructuring.

S&M expenses declined by $480,026, primarily due to a headcount decrease. Travel and marketing-related activity also declined, which resulted in a further decrease of $160,271.

Amortization & Depreciation

The overall depreciation of fixed assets during the 2019 and 2020 period was consistent, however, as Peraso transitioned from pre-production into commercial production, the depreciation on production masks was reclassified as cost of goods of $573,762.

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Net Finance Expenses

The increase in net finance expenses can be attributed to the following:

Results of Operations for the Six-Months Ended June 30, 2021 and June 30, 2020

Peraso recorded a net loss of $9,533,827 (or $0.08 per share) for the six months ended June 30, 2021 as compared with a net loss of $6,062,242 (or $0.08 per share) for the six months ended June 30, 2020.

The increase in the loss of $3,471,585 between the periods is primarily due to the following factors, and the material differences are discussed further below in this section:

Revenue

An increase in IC product sales by $956,425 between the periods was offset by a decline in NRE revenue of $1,350,000.

R&D, G&A and S&M Expenses

An approximate $1.3 million increase in R&D expenses was due to an increase in option expenses during the six months ended June 30, 2021 attributed to the issuance of approximately 18.6 million new Peraso Options and 2.6 million replacement options in September 2020, as well as the issuance of 797,000 Peraso Options in May 2021. The remaining increase in salaries and consulting expenses were offset by the government rent subsidy that became effective during the three months ended December 31, 2020.

The $35,000 decrease in G&A expenses was due to decreased legal expenses, bad debt expense and wage and rent expenses. The decrease in wage and rent expenses was attributed to the government wage and rental subsidies for the six months ended June 30, 2021 compared to June 30, 2020. This was offset by an increase in option expenses, consulting expenses and accounting / auditing expenses.

During the six months ended June 30, 2020, legal expenses were higher as Peraso went through a series of capitalization and restructuring events involving multiple attorneys and consultants, regarding convertible note term sheet, conversion of preferred shares and lawsuits resulting in significant legal expense.

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During the six months ended June 30, 2020 accounting and consulting expenses were higher due to the transactions contemplated by the Arrangement and GAAP Conversion.

A decline of $102,000 in S&M expense was attributable to the decreased headcount and reduced marketing and sales activities because of the COVID-19 lockdowns.

Amortization & Depreciation

However, the decline of $109,000 is mainly due to a large $1.2 million in assets becoming fully depreciated as of August 2020. Additionally, Peraso made no capital expenditures during the six months ending June 30, 2021. The intangible assets were also fully amortized as of 2020.

Net Finance Expenses

The increase in net finance expenses can be attributed to the following:

Gain or Loss on Fair Value of Warrants

The change is due to the issuance of additional Peraso Warrants in the quarters ended December 31, 2020 and June 30, 2021, which increased the fair value of warrants.

Liquidity and Capital Resources

Peraso expects its cash expenditures to continue to exceed receipts in 2021, as its revenues will not be sufficient to offset its operating expenses, which include significant research and development expenditures for the expansion and fabrication of its IC products. To continued operations, Peraso will need to raise additional capital from the issuance of equity or debt and achieve and maintain profitability. During the year ending December 31, 2020, Peraso did not generate significant revenue, incurred a net loss of $10,226,861, and incurred negative cash flows from operations of $10,237,434. It also had an accumulated deficit of $106,287,676 at December 31, 2020. For the six months ended June 30, 2021, Peraso incurred a net loss of $9,533,827 and had an accumulated deficit of $115,821,502 at June 30, 2021.

Loan Facilities

In 2020, Peraso entered into debtor in possession credit agreements (the “DIP Loans”) to access financing to fund certain cash requirements during the CCAA proceedings. Proceeds from the DIP Loans totaled $6,150,000.

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

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On November 30, 2020, Peraso entered into a tax credit financing agreement with Venbridge Ltd. to raise funds secured by all of the tangible and intangible property and undertaking of Peraso now owned or hereafter acquired. The proceeds from first draw totaled $587,000 (CAD$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 Peraso’s tax credit refund.

On February 5, 2021 and March 5, 2021, Peraso raised additional funds from the second and third draw on the loan sanctioned against Peraso’s tax credit refund of $275,065 (CAD$350,000) and $276,290 (CAD$350,000) respectively, net of financing fees of $14,256. The interest rate is 1.60% per month, compounded monthly.

As of June 30, 2021, Peraso’s SRED (tax credit) financing amounted to $1,263,758.

Convertible Debentures

In December 2019, Peraso 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 Peraso’s assets. Finance fees incurred for the issuance of the convertible debentures amounting to $73,608 were recorded as debt discount. Peraso also granted to a noteholder warrants to purchase 40,568 Peraso Shares. The fair value of these warrants of $34,982 was initially recorded as liability and debt discount.

During March 2020, Peraso issued Peraso Convertible Debentures for a total principal amount of $3,885,000, such Peraso Convertible Debentures due on December 31, 2023. The Peraso Convertible Debentures bear interest at a rate of 6% per annum and are secured by Peraso’s assets. Finance fees incurred for the issuance of the Peraso Convertible Debentures amounting to $433,122 were recorded as a debt discount. Peraso also granted to certain holders of Peraso Convertible Debentures warrants to purchase 1,554,000 Peraso Shares. The fair value of these warrants of $1,228,647 was initially recorded as liability and debt discount.

During October 2020, Peraso settled a portion of its DIP Loans amounting to $2,550,000 through issuance of Peraso Convertible Debentures that will mature on December 31, 2023. The Peraso Convertible Debentures bear interest rate of 6% per annum and are secured by Peraso’s assets. Peraso also granted to certain holders of such Peraso Convertible Debentures warrants to purchase 4,468,280 Peraso Shares. The fair value of $3,592,855 in respect of such Peraso Warrants was initially recorded as a liability and debt discount up to the face value of the Peraso Convertible Debentures, and a finance expense of $1,042,856 recorded on the statement of operations for the remaining portion. 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 CAD$0.15 and 80% of the per share price paid by the investors in such financing.

During April 2021, Peraso issued Peraso Convertible Debentures for a total principal amount of $5,899,308, such Peraso Convertible Debentures due on December 31, 2023. The Peraso Convertible Debentures bear interest at a rate of 6% per annum and are secured by Peraso’s assets. Finance fees incurred for the issuance of the Peraso Convertible Debentures amounting to $353,958 were recorded as a debt discount. 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 CAD$0.15 and 80% of the per share price paid by the investors in such financing. Peraso also granted to certain holders of Peraso Convertible Debentures warrants to purchase 2,947,058 Peraso Shares. The fair value of $2,604,419 in respect of such Peraso Warrants was initially recorded as liability and debt discount. In the event of a liquidation prior to conversion or repayment, subject to certain limitations, Peraso shall pay an amount to the holder equal to three 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 $512,673 and $476.

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For the years ended December 31, 2020 and 2019, $318,044 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.

The recorded debt discounts are amortized over the terms of the related convertible debentures. During the three and six months ended June 30, 2021, amortization of the debt discount amounted to $536,321 and $884,456, respectively.

For the three and six months ended June 30, 2021, $188,352 and $309,416, respectively, in interest expense was recognized.

Warrants

Warrant activity and the related changes in the estimated fair values were as follows:

Warrants outstanding at June 30, 2021 and at December 31, 2020 and their respective exercise price and expiration dates, are as follows:

The fair value of the warrant liability is estimated using the Black-Scholes model. Peraso 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 Peraso. 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

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Peraso has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The underlying stock price is based on the most recent cash sale price of preferred shares.

The estimated grant date fair value ranged between $0.43 to $0.89 and $0.45 to $0.86 as of June 30, 2021 and December 31, 2020, respectively. The fair value was 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 and two to five years, respectively; risk-free interest rate of 0.83% based on a comparable U.S. Treasury bond, expected volatility of 111.43% and expected dividend yield of zero.

Convertible Preferred Shares

In March 2020, Peraso filed articles of amendment, wherein the ratio for the conversion of the Preferred Class C shares into common shares was modified from 1:1 to 1:1.25.

On March 13, 2020, all of the outstanding preferred shares were converted into Peraso Shares. There were no outstanding preferred shares or accumulated dividends as of December 31, 2020.

Common Stock

Peraso is authorized to issue an unlimited number of common shares.

On March 13, 2020, Peraso 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 Class B preferred shares were converted into common shares based on the original conversion price of CAD$1.00 ($0.72).

On March 13, 2020, Peraso 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 CAD$1.18 ($0.85). As a conversion inducement, Peraso amended the ratio for the conversion of the Class C preferred shares into common shares from 1:1 to 1:25. Peraso 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.

In May 2021, certain employees exercised a total of 365,000 Peraso Options at an exercise price of CAD$0.10 which increased Peraso’s capital stock from $100,548,455 to $100,578,350.

Off-Balance Sheet Arrangements

Peraso has no off-balance sheet arrangements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Peraso has had no disagreements with its accountants on accounting and financial disclosure. Peraso changed its financial auditor from PricewaterhouseCoopers LLP to Weinberg & Co. in early 2021 while transitioning from Canadian ASPE to GAAP to comply with Nasdaq and SEC regulations.

Statement of Peraso Executive Compensation

Compensation Discussion and Analysis

Overview of Compensation Program

The Peraso Board has responsibility for establishing, implementing, and monitoring adherence to its compensation philosophy and for approving any changes regarding executive compensation or changes to plans or policies or by applicable Law.

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Compensation Philosophy

In general, Peraso’s executive compensation policies are designed to recruit, retain and motivate qualified executives by providing them with a competitive total compensation package based in large part on the executive’s contribution to its financial and operational success, the executive’s personal performance and increases in stockholder value. Peraso believes that the total compensation paid to its executives should be fair, reasonable and competitive. However, base salaries for most key employees have not been adjusted in over two years, due to limited cash resources.

Peraso seeks to have a balanced approach to executive compensation with each primary element of compensation designed to play a specific role. Overall, Peraso designed its compensation programs to allow for the recruitment, retention and motivation of the key executives and high-level talent required in order for it to:

Role of Executive Officers in Compensation Decisions

The CEO makes recommendations for equity and non-equity compensation for executives to be approved by the Peraso Board. The CEO annually reviews the performance of the executives (other than himself) and presents his recommendations for proposed salary adjustments, bonuses and equity awards to the Peraso Board. At its discretion, the Peraso Board may accept, modify or reject the CEO’s recommendations. The Peraso Board evaluates the compensation of the CEO on its own without the participation or involvement of the CEO. Only the Peraso Board is authorized to approve the compensation for any Peraso Named Executive Officers. Compensation of new executives is based on hiring negotiations between the individuals and its CEO and the Peraso Board.

Elements of Compensation

Consistent with its compensation philosophy and objectives, Peraso offers executive compensation packages consisting of the following three components: (1) base salary; (2) incentive compensation; and (3) equity awards.

1) Base Salary

Because its compensation philosophy stresses performance-based awards, base salary is intended to be a smaller portion of total executive compensation relative to long-term equity. The Peraso Board takes into account the executive’s scope of responsibility and significance to the execution of its long-term strategy, past accomplishments, experience and personal performance, and compares each executive’s base salary with those of the other members of senior management. The Peraso Board may give different weighting to each of these factors for each executive, as it deems appropriate. The Peraso Board did not retain a compensation consultant or determine a compensation peer group for 2020 or 2019.

2) Incentive Compensation

No cash incentive compensation was paid to any Peraso Named Executive Officers for 2020 or 2019.

3) Equity Awards

Although Peraso does not have a mandated policy regarding the ownership of shares of common stock by officers and directors, Peraso believes that granting equity awards to executives and other key employees on an

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ongoing basis gives them a strong incentive to maximize stockholder value and aligns their interests with those of Peraso’s other stockholders on a long-term basis. The equity plan enables Peraso to grant equity awards, as well as other types of stock-based compensation, to its executive officers and other employees. The Peraso Board reviews and approves all equity awards granted under the equity plan. Peraso grants equity awards to achieve retention and motivation upon the hiring of key executives and other personnel, and / or when Peraso believes that competitive forces or economic conditions threaten to cause its key executives to lose their motivation and/or where retention of these key executives is in jeopardy.

With the Peraso Board’s approval, Peraso grants Peraso Options when it initially hires executives and other employees, as a long-term performance incentive. The size of the initial option grants to newly hired executives and employees is recommended by management and approved by the Peraso Board. In addition, the Peraso Board would consider other relevant information regarding the size and type of compensation package considered necessary to enable it to recruit, retain and motivate the executive.

Unless otherwise determined by the Peraso Board and as disclosed in Note 3 to the condensed financial statements of the Outstanding Equity Awards as of December 31, 2020 section, Peraso Options vest with respect to one-fourth of the total number of shares subject to the grant on the first anniversary of the grant date and thereafter 6.25% will vest on the first day of each calendar quarter following the first anniversary of the grant date. Peraso grants Peraso Options with an exercise price equal to fair market value on the date of the grant, as determined by the Peraso Board.

Additionally, in May 2021, the Peraso Board approved the grant to certain key employees of 6,729,875 Peraso Options contingent upon conversion of the convertible debentures (if any)    . The Peraso Options have an exercise price of CAD$0.15, standard vesting and are subject to active employment on the conversion date.

Table of Compensation Excluding Compensation Securities

Notes:

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Outstanding Equity Awards as of December 31, 2020

The following table sets forth information regarding the outstanding equity awards held by the Peraso Named Executive Officers as of December 31, 2020.