BSQUARE CORP /WA

In April 2021, we commenced a registered securities offering pursuant to an At-Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley”). The Sales Agreement provides that we may offer and sell our common stock having an aggregate offering price of up to $25.0 million from time to time (the “Offering”) through or to B. Riley, acting as our sales agent or principal. We did not receive any proceeds from the Offering during the first quarter of 2021.

Our cash and cash equivalents decreased by $2.6 million in the first quarter of 2021. Most of this cash was used for Microsoft royalties payable following the conclusion of a strong fourth quarter of 2020. In 2020 we received a $1.6 million loan under the Paycheck Protection Program ("PPP") to cover payroll and other permitted expenses, which helped to mitigate negative effects of the COVID-19 pandemic. We believe our current cash balance and lack of debt service obligations (other than any unforgiven portions of our PPP loan principal) have provided and will continue to provide sufficient liquidity for the business.

As part of the Offering, we may issue up to $25.0 million of common stock from time to time. The issuance from time to time of shares in the Offering, as well as the possibility that we may issue shares in future offerings, could have the effect of depressing the market price, or increasing the market price volatility, of our common stock. The number of shares we may sell, and any resulting impact on market price or volatility, is highly uncertain because we have the broad discretion regarding the number of shares we instruct the Sales Agent to sell, the market price of the common stock during the sales period, the limits we set with the Sales Agent in any applicable placement notice, and the demand for our common stock during the sales period. It is not currently possible to predict the number of shares that will be sold or the gross proceeds to be raised in connection with those sales.

You may experience future dilution as a result of future equity offerings.

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We may not be able to sell shares or other securities in any offering at a price per share that is equal to or greater than prevailing market prices, and investors purchasing shares or other securities in the future could have rights superior to existing shareholders. The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than currently prevailing prices per share.