Peraso Inc (NASDAQ:PRSO)., a semiconductor company, has informed Nasdaq that it believes to have regained compliance with the stockholders' equity requirements for continued listing on The Nasdaq Capital Market. This development follows a recent financial maneuver involving the exercise of existing warrants and the issuance of new ones, which collectively raised the company's stockholders' equity above the $2.5 million threshold set by Nasdaq.
On November 13, 2024, Peraso notified Nasdaq of its stockholders' equity status as of September 30, 2024, which was approximately $2,026,000, falling short of the minimum requirement. However, the company's subsequent Warrant Inducement Offering, which involved holders of existing Series B warrants exercising them at a reduced price for cash, resulted in net proceeds of approximately $2.6 million. This action effectively increased Peraso's stockholders' equity beyond the required minimum.
The company's confidence in regaining compliance was detailed in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. Nasdaq will monitor Peraso's ongoing compliance with the equity requirement, and the company may face delisting if it fails to demonstrate compliance in its next periodic report.
In other recent news, Peraso Inc. reported a drop in total net revenue to $3.8 million for Q3 2024, down from $4.5 million the previous year. Despite this, the company has reduced operating expenses by nearly 20% and narrowed its net loss.
The company sees a promising future with increased customer engagement and military contracts. Peraso anticipates a revenue inflection point starting in Q1 2025 and expects double-digit growth in the second half of 2024 compared to the prior year.
A significant order includes a $1.4 million follow-on from a South African WISP and initial military orders. The company's millimeter-wave solutions are gaining traction, with 82 customer engagements and nine design wins. Peraso's technology is now eligible for funding under the U.S. government's BEAD program, which is expected to support ongoing engagements and market opportunities.
Peraso's Q4 2024 revenue is projected to be between $3.6 million and $4 million. The company plans to fulfill its backlog of memory IC orders by the end of Q1 2025.
InvestingPro Insights
Peraso Inc.'s recent efforts to regain compliance with Nasdaq's listing requirements come against a backdrop of significant financial challenges, as revealed by InvestingPro data. The company's market capitalization stands at a mere $2.34 million, reflecting the market's current valuation of the firm. This low valuation is underscored by InvestingPro Tips, which indicate that Peraso's stock has "taken a big hit over the last week" and has "fared poorly over the last month," with a one-month price total return of -52.63%.
The company's financial health appears precarious, with InvestingPro Tips noting that Peraso is "quickly burning through cash" and "suffers from weak gross profit margins." This is corroborated by the data showing a gross profit margin of 21.73% for the last twelve months as of Q3 2024. Additionally, the company's revenue growth is negative at -19.46% for the same period, suggesting ongoing operational challenges.
Despite these headwinds, Peraso holds more cash than debt on its balance sheet, which may provide some financial flexibility as it works to maintain its Nasdaq listing. Investors considering Peraso should note that InvestingPro offers 15 additional tips for this stock, providing a more comprehensive analysis of its financial situation and market performance.
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