Speaker 0:

Good day, and welcome to q three investor summit virtual. We appreciate your participation in today’s virtual event. Up next, we are pleased to introduce Peraso Incorporated. If you would like to ask a question during the webcast, you may drop them in the chat box spots on on the left side of your screen. Please type your question into the box and click send to submit. At this time, it is my pleasure to hand over the session to Ronald Glibbery, CEO at Pperazzo Incorporated, who will lead the presentation. Sir, the floor is yours.

Speaker 1:

Good afternoon, and welcome to the Pperazzo q three twenty twenty five investor presentation. Uh, we’ll move on to the first slide. So quick snapshot about Perazzo. Our focus on technology called millimeter wave. We’re a fabulous semiconductor company. Uh, so we produce chips for a living. We subcontract them just like the NVIDIA business model where we use a third party to build build our chips, although we design and sell them. We’re a global leader in the development of, uh, semiconductor devices for millimeter wave technology. We’ve been shipping since 2016, and we have products really across the world, North America, Africa, China, Japan. We put a lot of effort into our, uh, intellectual property. We have in a wireless side of things, we have over 50 patents issued and pending, and we have nine essential claims patents for the eight zero two dot 11 a y standard. And we have secured design rates across a diverse field of, um, of applications. This includes fixed wireless access, tactical communications, transportation, and and video, and I’ll get into, uh, all of those as we proceed through the the presentation. So just a quick, uh, sidetrack into the technology. So we focus on a technology called millimeter wave, which is the spectrum from 24 to 300 gigahertz. You can see a key aspect of our technology is what we call beam forming, and that’s gonna permeate throughout the presentation. So, uh, so it’s kind of a fundamental part part of the our technology offering. You can see basically that, you know, as opposed to traditional wireless, we form very focused, uh, electromagnetic beams. This gives us two primary advantages. One advantage is that well, first of all, broadly, you know, these these beams are very high data rates and very low latency, which is great for communications. Uh, but a couple of other advantages that we can, uh, address many users at the same time, so very dense user environments. Uh, and another that’s emerged for us is the that’s what we call stealth technology. So in other words, in a battlefield environment, it’s very difficult to, uh, a, detect these beams and, b, to jam them. So that’s become an important aspect of our technology in the in the military space. So, again, as we proceed throughout the presentation, just keep in mind, uh, key part of our technology is this ability to create these beams, uh, in the in the RF spectrum. In terms of growth, you can see that the there’s a couple of, uh, charts I wanna show here. The first is the overall chipset market, uh, in in this technology. Today, it’s estimated that this market is about a $5,000,000,000 opportunity, growing to over about $30,000,000,000 by 2010 uh, 2033. This is a 25% compounded annual growth rate, so a very important part of the overall, uh, communications market. And then peeling back the onion a little bit, more specifically in defense, you know, defense contractors are starting to recognize the importance of this technology to be stealth in a battlefield environment. We see this market growing from about 624,000,000 this year to 7,170,000.00 $1.07 $9,000,000, uh, which is a 42% CAGR. So, uh, very, uh, you know, both all markets very, you know, very nice growth rate, and, uh, certainly, we, um, we’re we’re seeing that in terms of our specific growth rate on our business. So MM wave, millimeter wave is becoming a really critical part of the, um, of the electronics market. The real key issue here is, uh, going back to our original business thesis, which is that traditional wireless is getting saturated. There’s so many devices in the world that utilize existing spectrum that the world needs new spectrum, uh, to facilitate these these key applications moving forward. And that’s really kind of our the business our working business thesis that we that we operated on. So the first broad market that we focus on is called fixed wireless access, and this is high speed access, high speed Internet access, uh, wirelessly. We obviously focus on the 60 gigahertz range. Our lead customer in this market was a company called Ubiquiti. Last week, Ubiquiti broke, like, the $30,000,000,000 evaluation. So very, very credible market. All of their millimeter wave products are based on our technology. So they have about eight to 10 products in the marketplace. You can see from the from the picture below the at the last, uh, fixed wireless conference, you all of the products that Ubiquiti was showing, we were quite proud of, uh, were based on on on Paragel Silicon. So, uh, so this this is obviously a very, very important customer to us. Um, basically, we’ve been shipping to them since 2019, um, but their focus is on a really American rural environment. And the thing about rural is that it’s, you know, it’s a good market, but it’s kinda low low volume ish, if you will. So but it was good for Peralta because we were a young company, and it gave us a chance to tweak our technology and then enhance our technology over time. So but it was a good a good way for us to really be provide the broader market, uh, very, very solid product opportunities. So Ubiquiti is our lead customer, and still today is our is is is is probably our our main customer, if you will. But a real change over the last couple years has been, uh, new customers, uh, focused on what we call dense urban environments. And what this means actually is let me see if I can do this. Uh, this is the ability to actually not just address rural environments, but also high volume urban environments. We call this technology Dune, so for dense urban network environment. And the idea here is that, uh, as opposed to very low volume, low density rural environments, we focus on very high density, high volume urban environment. So, uh, we’ve actually announced, uh, design wins and opportunities in Los Angeles with our partner, Wielink. That was just a couple weeks weeks ago. By the way, with Wheeling, they were also focused on Las Vegas and Phoenix. Uh, South Africa is a major deployment and the townships of South Africa. There’s no denser environment in the world in this. Uh, so, basically, we’re shipping we’ve been shipping all this year, uh, and a very, uh, important part of our business here has been into South Africa. And, um, even now, we’re we’re winning other rural place or urban places in Africa like like Lake Kenya. So this has become a very important part of our business, uh, and another aspect to our fixed wireless business. So so so for us, I would say today, fixed wireless is really our our kind of anchor application to wireless, but I’ll talk about where we’re seeing, uh, growth opportunities after that. Uh, an important development that we’ve seen, uh, over the last, uh, well, several years, but really, um, now has a finer point is what we call the b program. This is a program in The States, The United States, that that actually is, uh, to the tune of $42,450,000,000 that’s designed to facilitate providing all Americans with high speed Internet. Uh, so the idea here is that, you know, many, many Americans have have weak Internet, poor Internet, or no Internet. Uh, so the idea is for the US government. This was initiated with the Biden administration, but it’s more even more aggressively than carried on by the Trump administration. So the idea is that the idea is that, uh, you know, the service providers throughout continental and, uh, even Alaska and Hawaii in The States, uh, are underscored by the gov by the big program from the government of the United States to provide high speed access, uh, to all citizens of those states and using it, uh, in a technology neutral approach. That means it can be fiber, it can be coax, or or it can be wireless. And, obviously, we come in on the wireless side of things. So we think this is a a very, very important part of the business. By March ’25, there were over 4,000 b programs, uh, applications received, and we really seem expect to start to see the fruit of this, uh, in 2026 in in our business. So, you know, of course, guys like Ubiquiti, uh, uh, will be beneficiaries as well. Uh, but we think b was, uh, was an important, uh, you know, growth topic, uh, in the fixed wireless aspect of our our our business. So it turns out for the first few years of our company, uh, fixed wireless access was the key application. But we’re really pleased that over the last couple of years, this whole concept of stealth communications has become very, very important part of our business. And so the idea here is because of that beam forming that I showed you, uh, on prior slides, actually is very difficult, almost impossible to detect on a battlefield. So the idea here is militants wanna keep their positions, uh, confidential. They don’t want to announce their position to the enemy through communications. The enemy normally can really triangulate positions, uh, through traditional wireless technology, but with our technology, that’s not possible because of our beamforming capability. The other aspect to our technology is once, uh, we are having, uh, communications because the enemy can’t see it, they also can’t jam it. So it’s not just low probability of detection. It’s also low probability, uh, of of of jamming as well. So and another key kinda interesting aspect to our technologies because, uh, we we use unlicensed bands. Militators are kind of free to go to most countries in the world without interfering with their with their license spectrum. Uh, so so, basically, we’re, you know, engaged with, uh, you know, several military contractors. But the most exciting part of this, you know, business for us is that we actually have a key design win that we announced in April 2025 with a military contract in The Middle East. Now it turns out this application is still confidential, but, you know, basically, the the the key idea on this is that it actually is a safety, uh, mechanism, uh, to avoid, uh, what we refer to as friendly fire, uh, in in the in the military environment. So, basically, um, you know, this application, you know, is, uh, turns out to be very, uh, useful application using our technology. Over an application is very adept to our technology. Uh, and, actually, uh, it’s so urgent that this technology get deployed, uh, that we actually started shipping our volume products, uh, just, uh, by June 2025. It turns out that, actually, uh, you can imagine that, uh, this this technology, uh, is, you know, basically saving lives. So it’s really not an offensive weapon. It’s more of a defensive device that actually, um, helps soldiers avoid this whole concept of what we call blue on blue or friendly fire, uh, casualty. So, uh, and and I think the most, uh, important part of this is that, you know, today we’re focused on The Middle East, but the technology can be really applied on a glow like, on a global basis. Obviously, with friendly, uh, you know, with friendly nations, but but the volume opportunity here kinda rivals our Fitz Wireless business, if you will. So, uh, you know and, again, all driven by the fact that we operate in a stealthy, uh, in a stealthy environment. So we we think, um, you know, we think this this the whole military opportunity can be, uh, at least as big as our fixed wireless opportunity. By the way, the other aspect of this is, you know, kind of more recent and actually not even on this slide is the fact that we are now testing those same concepts on drone applications. So not only, you know, controlling drones through through, again, through stealth stealthy communications, but also using our friendly fire application in a drone application. So drones do not, uh, fire, uh, upon, uh, their their their their own soldiers or or or equipment on the field. So, uh, so so so middle of the wave is just a terrific technology for the military, and we see that as a major part of our business moving forward. A couple of other, you know, markets worth mentioning, transportation. So this is the you can see in the picture. We got buses, trains, planes. The idea here is in real time providing, you know, passengers on these devices with real time, uh, high speed Internet. And, actually, maybe something I didn’t mention when I talked about our our beamforming is that not only are the beams stealthy, uh, but they actually move in real time. So, of course, all of these devices are are moving, uh, but, um, but, you know, of course, the idea is that, um, the the beams track these moving devices and provide passengers with very high speed, very low latency, uh, Internet communications in in in real time. And finally, another market that we, uh, actually are seeing some nice traction in is, uh, what we call professional video delivery. So for example, VR, uh, and it doesn’t necessarily have to be just VR. It can be, you know, for example, the, uh, the Ray Ban sunglasses or VR or any headset that regards high speed, uh, data communication. Excuse me. Data communication can be applied, uh, using our our our technology. And, really, the the the problem with conventional wireless is it just doesn’t have the data rates, and it just doesn’t have the latency to meet these strange applications. So, um, as a matter of fact, for example, one of the the the pictures we have in this, uh, in this slide is in an operating environment. So we actually have a customer, uh, in in in Los Angeles who’s actually using our chips, uh, in an operating room environment. The idea here is as the surgeon is doing surgery, uh, the real time images, uh, and video come up with low latency, of course, because you certainly don’t want, uh, any kind of latency in in in those type of applications. So so we’re seeing some nice traction there as well. So I’d summarize that the main applications we’re focused on are fixed wireless access, military, uh, tactical communications, transportation, and professional video delivery. I really like this slide because it really shows, like, our our growth. So if you look at where we were, um, in in in 2023, we had seven customers in in production, and and now we have, uh, I can’t actually see it. I don’t wanna speak out of turn, but we have more customers in production. So, Yeah. So so so, basically, the idea here is this this is just a sense of where we’re trying to provide our investors with, like, what is our what is our our growth? And I think what’s really important is that, you know, we spent a lot of money on, uh, developing a very unique, a very, you know, essential technology. But the market in and of itself is not stagnant. It’s actually growing significantly. So, again, fixed wireless is, you know, uh, growing. Military is growing and so on. So and you can see that in our in our in our pipeline. And so, basically, in our customer engagement, it’s growing significantly. And really importantly, our customer’s in production. And this so the proof is in the pudding. And so the and the do we talk the talk in terms of, you know, market opportunities, but, um, I know but we’re seeing that in in, really, our customer engagement. And the next slide, I think, is actually, uh, very interesting as well. So this is actually, um, uh, but, you know, you know, these are products in the field, and you can actually, you know, Google all of these products we had in in in 2023. We had 31, uh, products in the marketplace. Today, we have 59. Uh, or as of at least as of q two, having more today. But as of q two twenty twenty five, we have 59. These are real products that customers have invested in. They’ve engineered, uh, they brought to production. So these are real products you can get your hands on. You can buy them. Uh, and so, basically, it’s not, uh, you know, theoretically, these are real, you know, products that are that are in the marketplace and and that are being sold, um, by our customers. So we’re very, very proud of the idea that even over the last, you know, six to nine months, we’ve almost doubled the number of products that are in the field in the marketplace. So just to summarize, uh, in terms of, you know, kind of the investment opportunity, uh, our focus is on 60 gigahertz. I would say we’ve become not only the premier supplier, but really moving towards the only supplier. We had several competitors five years ago. I can go through them, uh, case by case, but, basically, they’ve all gone by the wayside. And why is that? The reason is because we’ve executed. This is a very difficult technology with what we call a very deep and wide mode. So very difficult to compete with us, and we beat out our competition on a case by case business systematically over the last five years. We have over a 100 distinct customer engagements. Our customers love us. Uh, for a little I I can’t really name names, but, uh, one of our most stringent customers called our technology bulletproof. And it made me so proud because, basically, this is a really tough customer, and they said, you know what? Your stuff just works. There’s no products we’ve ever shipped before that work as well as your product. So we’re really proud of the fact, uh, that we’ve made so much progress in our customer engagement. And just to reiterate our original business thesis, uh, you know, the idea was that wireless technology will become scarce. It’s going to be a need for news new, um, technologies to facilitate new spectrum, and that’s what we do for a living. So I think on that note, I’ll wrap it up and hand, um, hand some financial analysis over to our CFO, Jim, uh, Jim Sullivan.

Speaker 2:

Thanks, Ron. Uh, you know, just quickly, when you look at our 2024 revenue, it’s about 14 and a half million dollars. You know, the key metric here is about 90% of that was from our legacy memory integrated circuits, uh, business. We had announced the end of life of that product, uh, over two years ago. Um, we believe we’ve completed end of life shipments in q one two five, uh, 2025 rather. Although I hesitate to, you know, never say never. We We still have some inventory. Maybe somebody comes back. Um, we could sell some more. Um, but, really, the key transition was that in, um, you know, effective with the 2025, we’re a pure play millimeter wave company. And there’s a couple of couple of metrics I’d just like to highlight. On the millimeter wave revenue, you could see all of last year, we did 1,500,000.0 revenue. Um, you know, we had we were hit very hard like most of the industry by the post COVID inventory correction. You know, we had customers stop buying, um, including our largest customers. And like a lot of small, you know, smaller semiconductor companies, we have heavy concentration of customers, which I think is Ron displayed with the pipeline and customers, you know, products in the market. We’ve made great progress on, uh, you know, reducing that concentration. Um, but the net you know, the key metric is we did 1,500,000 all of last year. We did 1,600,000, so we beat it in the ’25, then grew that 40% in the second quarter. You know? So we’ve already done, you know, 3,800,000.0 of, um, you know, millimeter wave revenue on that side. And we’ve guided 2.8 to 3,100,000.0 for the, um, for the third quarter. So we see the trajectory there. You know, a couple of other metrics. Um, you know, the memory legacy memory products had high gross margins, high 60%. They’re very niche specialty prod products, you know, high pricing. You know, our target future target on millimeter wave is approximately a 50% gross margin. And we came pretty close in the second quarter, which, you know, we were we were pleased with. Um, the millimeter wave products, you know, go into, you know, in some cases, consumer device or towards consumer applications. You know, it it can be, you know, with some of the older customers, tougher to get the the, you know, those margins in the sixties. But, you know, we we are targeting at least a 50%. And now with some more consistent volumes and visibility, we feel very comfortable with our ability to, uh, to achieve that. Um, but, you know, really the key point is that when you look at total revenue from q one to ’25, revenue gross margins decreased because of the transition of memory no memory in q two twenty five. You know, likewise, without you know, with the reduction in revenue and gross you know, lower gross margin, um, you’ll also see the increase in our, you know, net loss and cash burn, um, in the second quarter. Those were, you know, were drivers of that, um, you know, that trend. Um, but, obviously, we see a a ramp in, uh, in millimeter wave that we look to keep going, and, you know, we have, um, you know, some of the best visibility we’ve had on our backlog, you know, in certainly in in recent quarters. You know, from a from a cash perspective, you know, we’ve disclosed that we have cashed into the 2025. We recently, um, closed a closed a warrant exchange here last week to bring in some additional, you know, additional cash. Um, obviously, um, you know, we wanna extend that runway. We haven’t made we’ll make an announcement, give an update on that on our earnings call here in the, you know, in the coming, you know, coming weeks after we report, uh, you know, q three. Uh, but, obviously, you know, doing what we can to improve our our balance sheet. I think the next slide is just our non GAAP reconciliation. And I think that, you know, that pretty much wraps it up. I think Ron did the summary already. You know, we are now a pure play millimeter wave company. Um, we see, um, you know, limited limited competition in the marketplace, um, and, you know, very excited about the opportunity for the growth in 60 gigahertz, I. E. The unlicensed spectrum that that folks can use without paying the expensive license and that, you know, much cheaper to deploy than fiber and, you know, works in areas remote areas, etcetera. You know, that, uh, it’s not practical cost effective to lay fiber. Um, with that said, we’re down to about seven minutes, so I’ll I’ll flip it over to, um, to questions. And I I think I might I think I addressed one of the first one here, um, about the cash burn, um, increase, um, which I think was referring to the, uh, you know, the second quarter, uh, I e with the drop off in in memory revenues, you know, having a having a short term impact that, you know, frankly, we need to, number one, manage our expenses and two, uh, grow millimeter wave to offset that. Um, the next question, Ron, is, um, who are our main competitors in the stealth realm, and how does our our, you know, millimeter wave technology stack up against those, you know, those parties?

Speaker 1:

Yeah. So I did I think I spoke to it in the presentation, but I’ll reiterate. So we had so probably our main competitor over the years was Qualcomm. Uh, I’m not here to say that we beat Qualcomm, but Qualcomm, you know, has moved on from this marketplace. They had some deficiency real deficiencies with their product. Uh, and so as opposed to kind of, you know, spending the money to re respin their product, and they just left the market to us. So Qualcomm was the main competitor. Um, we had, uh, two other you know, two or three other competitors that that have fallen by the wayside as well. Um, so I would say I it’s not even I would say. Like, I can say unequivocally both in the stealth mode and the middle of 60 gigahertz mode, we are really the sole supplier right now. We win, uh, every every time there’s a 60 gigahertz opportunity, uh, we win that opportunity. And we are engaged with some very large companies right now on some, uh, not just fixed wireless applications, but for example, even on the video side of things. So, uh, when someone needs 60 gigahertz, they come to Perazzo. There’s no one else I can speak to that’s really, uh, any any form of competition.

Speaker 2:

And, Ron, maybe, uh, just to further, you know, clarify that and then specifically asking about stealth, what would be the alternative technologies to millimeter wave and and the advantages we see in millimeter wave?

Speaker 1:

I mean, believe it or not, uh, so we’re and one of the opportunities is drones. So we so controlling drones, uh, again, would be stealth. So to be to I mean, I’m not sure if everybody realizes. One of the ways that the military is actually controlling drones stealthy is using they actually connect the drone to a fiber cable. It’s it’s quite amazing. So they have these spools of, like, 20 kilometer, uh, cables. Uh, so that’s one technology we compete with. The reason I mean, obviously, for obvious reasons, cables can, you know, get caught on trees. I mean, there’s all kinds of problems with running the cable. Uh, so but, basically, from a, you know, competitive perspective, a millimeter wave is really quite unique in in in the stealth capability from a certainly from a wireless perspective. I mean, I I I guess I could say, you know, maybe a point to make is there are other there are other frequency bands, uh, like like, let’s say, 26, 27 gigahertz. The the kind of the problem with those at at some level is that those are more licensed bands. So the problem is if you start controlling drones with those frequencies, they would interfere with traditional commercial frequencies. So you can run into interference issues, uh, and, certainly, you’re stopping on other people’s spectrum so that they’re not happy with that. So, um, there are problems with I mean, technically, other millimeter wave technologies can address, uh, this market, but there are some, uh, kind of ancillary problems you run into by using those other, uh, frequency bands.

Speaker 2:

And I think one one other quick question here, Ron, and I think you touched on one of them in the tactical, but a brief example of a current customer and how where they’re leveraging, uh, Parossa’s millimeter wave technology.

Speaker 1:

On on tactical?

Speaker 2:

No. No. Not necessarily on tactical. Um, perhaps maybe I know you touched on the tactical example. Maybe another example.

Speaker 1:

Okay. Um, well, I mean, I talked about the operating room. I talked about, uh, so oh, here’s one that I didn’t mention in the presentation. It’s quite it’s quite interesting. Uh, autonomous cars. So it turns out that autonomous cars drive around all day, and they get terabytes of information, I mean, on their video cameras. Then they go back and get charged, and they don’t want to to to be at the charger for more than two hours. So they’re looking for a technology to download all of that information, you know, to a server in less than two hours. It turns out if you do the math, you need very high data rates. I mean, I’m talking 10 to 20 gig gigabits per second. There’s one way to solve that problem, and that’s using the MMWA technology. So that’s an application we’re working on right now, but a great example where the high data rates are absolutely essential to facilitate that application. And, obviously, autonomous cars is a is a new and growing opportunity. So it’s it’s quite interesting because we’re starting to see these applications where you just need those extremely high data rates. Uh, so I think autonomous cars is another great application that we’re addressing with, uh, MMI technology.

Speaker 2:

Thanks, Ron. I think we’re we’re just up at here at the, uh, limit, so I will flip it back over to the operator. Operator?

Speaker 1:

Alright. Uh, thank you, Jim and Ron, for your presentation. Um, thank you to everyone also joining here today, and you have a great rest of the day. Thank you. Thank you for participating.

Speaker 2:

Thank you, everyone. Alright.

Speaker 1:

Bye bye.

Speaker 0:

That concludes Peralta Incorporated’s presentation. You may now disconnect. For details on upcoming presentations, please refer to the conference agenda. Thank you for your participation, and we look forward to welcoming you to the next session.