Peraso Inc. Commitments Disclosure

Note 5. Commitments and Contingencies

 

Leases

 

The Company has operating leases for its facilities in Toronto and Markham, Ontario, Canada and recognizes lease expense on a straight-line basis over the respective lease terms. The Company had an operating lease for its corporate headquarters facility in San Jose, California that was not renewed when the lease term expired on January 14, 2025.

 

In May 2022, the Company entered into a lease for the facility in Markham with a 60-month term, which commenced June 21, 2022. The initial right-of-use asset and corresponding liability of approximately CAD$1.0 million for the Markham facility lease were measured at the present value of the future minimum lease payments. The discount rate used to measure the lease assets and liabilities was 8%. The Markham landlord also provided a lease incentive of approximately CAD$286,200 (the Incentive). In 2023, the Company received payment of CAD$143,100 from the Markham landlord of the first installment of the Incentive. The remaining balance of the Incentive is paid to the Company in the form of an adjustment to rent during the last three months of each calendar year during the remaining lease term. As of December 31, 2025, the pending Incentive to be received was CAD$35,775.

 

In December 2023, the Company renewed the Toronto office lease for a reduced amount of square footage for a one-year term, which commenced January 1, 2024. Upon the renewal of the Toronto lease in December 2023, the Company recognized a right-of-use asset of approximately $137,700. The discount rate used to measure the lease assets and liabilities for the renewal was 8%. In December 2024, the Company renewed the Toronto office lease for a one-year term, which commenced January 1, 2025, and the Company ceased accounting for the lease under ASC 842.

 

On March 1, 2022, the Company entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of a right-of-use asset and lease liability of approximately $274,000. On March 1, 2025, the finance lease expired, and the Company took ownership of the equipment and the related right of use asset and liability was fully amortized.

 

On November 1, 2022, the Company entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of a right-of-use asset of approximately $124,000 and lease liability of approximately $117,000. The final invoice was dated August 15, 2025. The finance lease expired and the Company took ownership of the equipment. The related right-of-use asset and liability was fully amortized on October 15, 2025.

The following table provides the details of right-of-use assets and lease liabilities as of December 31, 2025 (in thousands):

 

		Year Ended December 31,
		2025				2024
Right-of-use assets:
Operating leases		$	143			$	213
Finance leases			—				54
Total right-of-use assets		$	143			$	267
Lease liabilities:
Operating leases		$	192			$	266
Finance leases			—				55
Total lease liabilities		$	192			$	321

 

Future minimum payments under the leases at December 31, 2025 are listed in the table below (in thousands):

 

Year ending December 31,
2026		$	106
2027			99
Total future lease payments			205
Less: imputed interest			(13	)
Present value of lease liabilities		$	192

 

The following table provides the details of supplemental cash flow information (in thousands):

 

		Year Ended December 31,
		2025				2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for leases		$	161			$	487

 

Rent expense was approximately $0.5 million and $0.7 million for the years ended December 31, 2025 and 2024, respectively. In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs related to the leased facilities.

 

Indemnification

 

In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has also entered into indemnification agreements with its officers and directors. No material amounts were reflected in the Company’s consolidated financial statements for the years ended December 31, 2025 and 2024 related to these indemnifications.

 

The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances applicable to each particular agreement. To date, the Company has not made any payments related to these indemnification agreements. 

Product Warranties

 

The Company warrants certain of its products to be free of defects generally for a period of three years. The Company estimates its warranty costs based on historical warranty claim experience and includes such costs in cost of net revenues. Warranty costs were not material for the years ended December 31, 2025 and 2024.

 

Legal Matters

 

The Company is not a party to any legal proceeding that the Company believes is likely to have a material adverse effect on its consolidated financial position or results of operations. From time to time the Company may be subject to legal proceedings and claims in the ordinary course of business. These claims, even if not meritorious, could result in the expenditure of significant financial resources and diversion of management efforts.

 

Purchase Obligations

 

The Company’s primary purchase obligations include non-cancelable purchase orders for inventory. At December 31, 2025, the Company had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $2.7 million.