Q2 2026 Peraso Inc Earnings Call

August 11, 2026

Speaker #1: Good afternoon, ladies and gentlemen, and thank you for your patience and your confidence. We'll begin shortly. Once again, thank you for your patience and your confidence.

Speaker #1: We'll begin shortly. Good afternoon, and welcome to Peraso Inc.'s second quarter 2026 conference call. At this time, all participants are on a listen-only mode.

Speaker #1: If anyone needs assistance at any time during the conference call, please press the star key followed by zero on your touchtone phone. As a reminder, this conference call is being recorded today, Tuesday, August 11, 2026.

Speaker #1: I would now like to turn the call over to your host for today's conference call, Mr. Jim Sullivan. Please go ahead.

Speaker #2: Good afternoon, and thank you for joining today's conference call to discuss process second quarter 2026 financial results. I'm Jim Sullivan, CFO at Peraso, and joining me today is Ron Glibbery, our CEO.

Jim Sullivan: Good afternoon, and thank you for joining today's conference call to discuss Peraso's Q2 2026 financial results. I'm Jim Sullivan, CFO of Peraso, and joining me today is Ron Glibbery, our CEO. Today, after the market closed, we issued a press release and related Form 8-K, which was filed with the Securities and Exchange Commission. The press release and Form 8-K are available on Peraso's website at www.perasoinc.com under the investor relations section. There is also a slide presentation that we will be using in conjunction with today's call that may be accessed through the webcast link on the IR website. As a reminder, comments made during today's conference call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended.

Speaker #2: Today, after the market closed, we issued a press release and related Form 8K, which was filed with the Securities and Exchange Commission. The press release in Form 8K is available on Peraso's website, at www.perasoinc.com, under the Investor Relations section.

Speaker #2: There is also a slide presentation that we will be using in conjunction with today's call that may be accessed through the webcast link on the IR website.

Speaker #2: As a reminder, comments made during today's conference call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Speaker #2: All statements other than statements of historical fact could be deemed as forward-looking. Peraso advises caution and reliance on forward-looking statements. These statements include, without limitation, any projections of revenue, margins, expenses, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, adjusted EBITDA, non-GAAP net loss, cash flows, or other financial items.

Jim Sullivan: All statements other than statements of historical fact could be deemed as forward-looking. Peraso advises caution and reliance on forward-looking statements. These statements include, without limitation, any projections of revenue, margins, expenses, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, adjusted EBITDA, non-GAAP net loss, cash flows, or other financial items, including anticipated cost savings, as well as any statements concerning the expected development, performance, and market share or competitive performance of our products or technologies. Any statements regarding the sufficiency of the company's capital resources and its ability to continue as a going concern. Any statements regarding customer demand forecasts and concentration risk, and any statements related to prospective future financing arrangements or capital transactions and the evaluation or pursuit of strategic alternatives. All forward-looking statements are based on information available to Peraso on the date hereof.

Speaker #2: Including anticipated cost savings, as well as any statements concerning the expected development, performance, and market share or competitive performance of our products or technologies.

Speaker #2: Any statements regarding the sufficiency of the company's capital resources, and its ability to continue as a going concern; any statements regarding customer demand forecasts and concentration risk.

Speaker #2: And any statements related to prospective future financing arrangements or capital transactions, and the evaluation or pursuit of strategic alternatives. All forward-looking statements are based on information available to Peraso on the date hereof.

Speaker #2: These statements involve known and unknown risks, uncertainties, and other factors that may cause Peraso's actual results to differ materially from those implied by the forward-looking statements.

Jim Sullivan: These statements involve known and unknown risks, uncertainties, and other factors that may cause Peraso's actual results to differ materially from those implied by the forward-looking statements, including unexpected changes in the company's business. More detailed information about these risk factors and additional risk factors are set forth in Peraso's public filings with the SEC. Peraso expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in terms of GAAP and non-GAAP. With respect to remarks on today's call involving non-GAAP numbers, unless otherwise indicated, referenced amounts exclude stock-based compensation expense and the change in fair value of warrant liabilities.

Speaker #2: Including unexpected changes in the company's business. More detailed information about these risk factors, and additional risk factors, are set forth in Peraso's public filings with the SEC.

Speaker #2: Peraso expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

Speaker #2: Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in terms of GAAP and non-GAAP.

Speaker #2: With respect to remarks on today’s call involving non-GAAP numbers, unless otherwise indicated, referenced amounts exclude stock-based compensation expense and the change in fair value of warrant liabilities.

Speaker #2: These non-GAAP financial measures, definitions, and the reconciliation of the differences between them and comparable GAAP measures are presented in our press release and related Form 8K, which provide additional details.

Jim Sullivan: These non-GAAP financial measures, definitions, and the reconciliation of the differences between them and comparable GAAP measures are presented in our press release and related Form 8-K, which provide additional details. For those of you unable to listen to the entire call at this time, a recording will be available on the investor relations page of our website. I'll now turn the call over to our CEO, Ron Glibbery, for his prepared remarks. Ron?

Speaker #2: For those of you unable to listen to the entire call at this time, a recording will be available on the Investor Relations page of our website.

Speaker #2: I'll now turn the call over to our CEO, Ronald Glibbery, for his prepared remarks. Ron?

Speaker #3: Thank you, Jim. Good afternoon, and welcome to everyone on the call and webcast. We appreciate you taking the time to join today's call. As reported in our press release this afternoon, revenue for the second quarter increased approximately 36% sequentially and was above our previous expectations. The sequential growth primarily reflected our successful fulfillment of a previously delayed order shipment to a new fixed wireless access customer.

Ron Glibbery: Thank you, Jim. Good afternoon, and welcome to everyone on the call and webcast. We appreciate you taking the time to join today's call. As reported in our press release this afternoon, revenue for Q2 increased approximately 36% sequentially and was above our previous expectations. The sequential growth primarily reflected our successful fulfillment of a previously delayed order shipment to a new fixed wireless access customer. Despite the better-than-anticipated top-line results this quarter, our overall business continues to be impacted by a combination of macro-related headwinds and irregular order patterns across our existing customer base. With limited ability to influence certain underlying market dynamics, particularly those affecting our leading fixed wireless access customers, we remain focused on the elements of the business we can control.

Speaker #3: Despite the better-than-anticipated topline results this quarter, our overall business continues to be impacted by a combination of macro-related headwinds and irregular order patterns across our existing customer base, with limited ability to influence certain underlying market dynamics, particularly those affecting our leading fixed wireless access customers, we remain focused on the elements of the business we can control.

Speaker #3: These include operational efficiencies, ongoing cost management, and enhancing the resilience of our supply chain, while continuing to cultivate extensive customer engagement across our target end markets.

Ron Glibbery: These include operational efficiencies, ongoing cost management, and enhancing the resilience of our supply chain, whilst continuing to cultivate extensive customer engagement across our target end markets. Turning to slide 4. Across each of our target end markets, we continue to be encouraged by the growing recognition of 60 GHz millimeter wave technology and its inherent performance benefits over conventional wireless communication solutions that operate in lower frequency bands. Historically, the most prevalent commercial application for 60 GHz technology has been fixed wireless access. While this continues to be the largest and maturest end market for Peraso, the rapid proliferation of AI and associated demand for hardware in support of AI infrastructure has led to significant market dislocations. With respect to fixed wireless access, this includes customers navigating persistently elevated memory prices and the constrained supply of other key components.

Speaker #3: Turning to slide 4. Across each of our target end markets, we continue to be encouraged by the growing recognition of 60 gigahertz millimeter wave technology, and its inherent performance benefits over conventional wireless communication solutions that operate in lower frequency bands.

Speaker #3: Historically, the most prevalent commercial application for 60 gigahertz technology has been fixed wireless access. While this continues to be the largest and most mature end market for Peraso, the rapid proliferation of AI and the associated demand for hardware and support of AI infrastructure has led to significant market dislocations.

Speaker #3: With respect to fixed wireless access, this includes customers navigating persistently elevated memory prices and the constrained supply of other key components. We believe this has, and is continuing to, contribute to subdued purchase order activity and limited near-term visibility into future customer demand.

Ron Glibbery: We believe this has and is continuing to contribute to subdued purchase order activity and limited near-term visibility into future customer demand. While these current market dynamics are expected to extend into Q4, the value proposition of 60 GHz millimeter wave technology in fixed wireless application is its commercially proven ability to overcome interference and capacity limitations in congested wireless environments. As such, we believe we are positioned to benefit once the current supply dislocations moderate and order patterns normalize. Having said that, it has become increasingly clear over the past 12 to 18 months that the inherent benefits of 60 GHz millimeter wave technology extend beyond traditional fixed wireless access applications. We continue to engage with prospective customers and partners seeking to utilize our 60 GHz solutions to address real-world challenges encountered in other end markets, namely in autonomous Edge AI, unmanned aerial vehicles, and defense communications applications.

Speaker #3: While these current market dynamics are expected to extend into the fourth quarter, the value proposition of 60 gigahertz millimeter wave technology and fixed wireless application is its commercially proven ability to overcome interference and capacity limitations, in congested wireless environments.

Speaker #3: As such, we believe we are positioned to benefit once the current supply dislocations moderate and order patterns normalize. Having said that, it has become increasingly clear over the past 12 to 18 months that the inherent benefits of 60 gigahertz millimeter wave technology extend beyond traditional fixed wireless access applications.

Speaker #3: We continue to engage with prospective customers and partners seeking to utilize our 60-gigahertz solutions to address real-world challenges encountered in other end markets, namely in autonomous edge AI, unmanned aerial vehicles, and defense communications applications.

Speaker #3: Today, we are actively engaged on a combination of new and existing opportunities to leverage Peraso's proven 60-gigahertz technology in both of these high-value end markets.

Ron Glibbery: Today, we are actively engaged on a combination of new and existing opportunities to leverage Peraso's proven 60 GHz technology in both of these high-value end markets. Turning to slide 5, I want to start with the substantial emerging market opportunity that we see for our technology in emerging Edge AI and associated autonomous systems applications. Whether it is operating a fleet of autonomous vehicles, a swarm of drones, or a factory floor full of robots, implementing Edge AI at scale creates a fundamental bandwidth challenge. These platforms typically require the continuous upload of massive volumes of sensor and camera data, as well as the download of large AI models and software updates. This often entails not only multi-gigabit data transfers, but doing so while operating in close physical proximity to many other independent autonomous devices. Traditional 5 GHz Wi-Fi technology struggles in these types of environments due to limited spectrum.

Speaker #3: Turning to slide 5, I want to start with the substantial emerging market opportunity that we see for our technology in emerging edge AI and associated autonomous systems applications.

Speaker #3: Whether it's operating a fleet of autonomous vehicles, a swarm of drones, or a factory floor full of robots, implementing edge AI at scale creates a fundamental bandwidth challenge.

Speaker #3: These platforms typically require the continuous upload of massive volumes of sensor and camera data, as well as the download of large AI models and software updates.

Speaker #3: This often entails not only multi-gigabit data transfers, but doing so while operating in close physical proximity to many other independent autonomous devices. Traditional 5-gigahertz Wi-Fi technology struggles in these types of environments due to limited spectrum.

Ron Glibbery: Traditional 5 GHz Wi-Fi technology struggles in these types of environments due to limited spectrum.

Speaker #3: Additionally, omnidirectional coverage creates widespread co-channel interference, or overlapping of wireless signals. As the number of devices sharing the same channel increases, the throughput collapses and latency becomes unpredictable.

Ron Glibbery: Additionally, omnidirectional coverage creates widespread co-channel interference or overlapping of wireless signals. As the number of devices sharing the same channel increases, the throughput collapses and latency becomes unpredictable. With 60 GHz technology, we utilize highly directional narrow beams. That directional nature significantly reduces co-channel interference, allowing numerous simultaneous multi-gigabit links to operate reliably inside the same physical footprint with deterministic low-latency performance. This is not just conceptual. In June of this year, we completed a customer demonstration with our partner, Virewirx Inc., that put these advantages on full display. Together, we created a simulated drone wireless environment and successfully operated a high-capacity network cluster that achieved a peak aggregate data rate of more than 50 Gb per second. Within the confined space of a large room, we simultaneously transmitted several independent multi-gigabit streams, something conventional sub-6 GHz technologies struggled to do at that density without severe interference.

Speaker #3: With 60-gigahertz technology, we utilize highly directional narrow beams. That directional nature significantly reduces co-channel interference, allowing numerous simultaneous multi-gigabit links to operate reliably inside the same physical footprint with deterministic, low-latency performance.

Speaker #3: This isn't just conceptual. In June of this year, we completed a customer demonstration with our partner Bioworks that put these advantages on full display.

Speaker #3: Together, we created a simulated drone wireless environment and successfully operated a high-capacity network cluster that achieved a peak aggregate data rate of more than 50 gigabits per second.

Speaker #3: Within the combined space of a large room, we simultaneously transmitted several independent multi-gigabit streams, something conventional sub-6 gigahertz technologies struggle to do at that density without severe interference.

Speaker #3: The demonstration also underscored two additional attributes that are critical for autonomous and mission-critical systems: the inherent low probability of intercept and detection of 60-gigahertz links, and the ability, when combined with Bioworks's network synchronization technology, to maintain coordination without reliance on GPS.

Ron Glibbery: The demonstration also underscored two additional attributes that are critical for autonomous and mission-critical systems. The inherent low probability of intercept and detection of 60 GHz links, and the ability, when combined with Virewirx' network synchronization technology, to maintain coordination without reliance on GPS. That GPS independence is particularly valuable in contested or GPS-denied environments. Looking ahead, we see applications in both defense, especially emerging drone swarm tactics and commercial settings such as automated factories, where large fleets of robots require high-capacity, interference-free connectivity. The Virewirx collaboration is a strong example of how complementary 60 GHz technology can address real-world applications that traditional wireless architectures were not designed to solve. As we have introduced on previous conference calls, many of these fundamental characteristics of 60 GHz are equally, if not more, critical in defense and tactical communications applications.

Speaker #3: That GPS independence is particularly valuable in contested or GPS-denied environments. Looking ahead, we see applications in both defense, especially emerging drone swarm tactics, and commercial settings, such as automated factories, where large fleets of robots require high-capacity interference-free connectivity.

Speaker #3: The Bioworks collaboration is a strong example of how complementary 60-gigahertz technology can address real-world applications that traditional wireless architectures were not designed to solve.

Speaker #3: As we’ve introduced on previous conference calls, many of these fundamental characteristics of 60 gigahertz are equally, if not more, critical in defense and tactical communications applications.

Speaker #3: Turning to slide 6, I want to highlight one of the most unique applications of our technology within the tactical communication space: IFF, which stands for Identification, Friend or Foe.

Ron Glibbery: Turning to slide 6, I want to highlight one of the most unique applications of our technology within the tactical communication space, IFF, which stands for identification friend or foe system. It goes without saying, today's increasingly modern battlefield is a complex and congested environment. The ability to rapidly and reliably distinguish friendly assets from hostile ones is mission-critical. Traditional IFF systems operate by transmitting what is known as an interrogation signal and receiving authenticated responses. These signals or links can be detected, jammed, or spoofed, exposing troops and assets to devastating consequences, including friendly fire incidents. 60 GHz technology is designed to meaningfully upgrade the performance of an IFF system in three ways. First, the highly directional narrow beam makes the communication links inherently difficult for an adversary to detect or intercept.

Speaker #3: It goes without saying, today's increasingly modern battlefield is a complex and congested environment. The ability to rapidly and reliably distinguish friendly assets from hostile ones is mission-critical.

Speaker #3: Traditional IFF systems operate by transmitting what's known as an interrogation signal and receiving authenticated responses. These signals, or links, can be detected, jammed, or spoofed, exposing troops and assets to devastating consequences, including friendly fire incidents.

Speaker #3: 60 gigahertz technology is designed to meaningfully upgrade the performance of an IFF system in three ways. First, the highly directional narrow beam makes the communication links inherently difficult for an adversary to detect or intercept.

Speaker #3: Second, that same directional beam combined with the physical properties of the 60 gigahertz band substantially reduces the risk of spoofing or successful jamming. Third, we have integrated our solutions to deliver these capabilities in a compact, low-power form factor.

Ron Glibbery: Second, that same directional beam, combined with the physical properties of the 60 GHz band, substantially reduces the risk of spoofing or successful jamming. Third, we have integrated our solutions to deliver these capabilities in a compact, low-power form factor. This makes it ideal for size, weight, and power-constrained platforms such as unmanned aerial systems or UAS. In partnership with our previously announced lead defense contractor, InTACT, we are continuing to make solid progress on the refinement and testing of next-generation drone IFF solutions. This system is purpose-built for highly contested electronic warfare environments and is designed to enable secure real-time mutual authentication between friendly drones and ground forces. Following our delivery of initial limited production modules earlier this year, feedback on this jointly developed solution continues to be positive, which we believe is meaningful validation of Peraso's 60 GHz technology for IFF applications.

Speaker #3: This makes it ideal for size, weight, and power-constrained platforms, such as unmanned aerial systems or UAS. In partnership with our previously announced lead defense contractor, INTACT, we are continuing to make solid progress on the refinement and testing of next-generation drone IFF solutions.

Speaker #3: This system is purpose-built for highly contested electronic warfare environments, and is designed to enable secure real-time mutual authentication between friendly drones and ground forces.

Speaker #3: Following our delivery of initial limited production modules earlier this year, feedback on this jointly developed solution continues to be positive, which we believe is meaningful validation of Peraso's 60-gigahertz technology for IFF applications.

Speaker #3: More broadly, the combination of stealth-oriented design, anti-jam, resistant architecture, and compact integration is generating expanded interest from additional prospective customers and partners seeking to evaluate the benefits of 60 gigahertz for their future product roadmaps.

Ron Glibbery: More broadly, the combination of stealth-oriented design, anti-jam-resistant architecture, and compact integration is generating expanded interest from additional prospective customers and partners seeking to evaluate the benefits of 60 GHz for their future product roadmaps. With that foundation, let me turn to the wider opportunity we see in unmanned aerial systems communications. Moving to slide 7. Building on the initial foundation from our ongoing work on IFF applications, we have identified and are beginning to target broader opportunities for our 60 GHz solutions and unmanned aerial systems. In fact, the rapid growth of UAVs and related systems, especially in defense and security applications, has helped to increase the awareness and the limitations of traditional sub-6 GHz radio links. These legacy systems are increasingly susceptible to wireless congestion, relatively easy to detect, and vulnerable to jamming in congested electromagnetic environments.

Speaker #3: With that foundation, let me turn to the wider opportunity we see in unmanned aerial systems communications. Moving to slide 7, building on the initial foundation from our ongoing work on IFF applications, we have identified and are beginning to target broader opportunities for our 60-gigahertz solutions in unmanned aerial systems.

Speaker #3: In fact, the rapid growth of UAVs and related systems, especially in defense and security applications, has helped to increase awareness of the limitations of traditional sub-6 gigahertz radio links.

Speaker #3: These legacy systems are increasingly susceptible to wireless congestion, relatively easy to detect, and vulnerable to jamming in contested electromagnetic environments. Additionally, modern drones have become highly data-intensive, with large arrays of sensors.

Ron Glibbery: Additionally, modern drones have become highly data-intensive with large arrays of sensors. They are also frequently required to support real-time coordination, autonomy, and swarm operations. Today's existing drone communications infrastructure is challenged to meet all of these demands. 60 GHz millimeter wave technology is designed to enable a fundamentally different solution for modern UAS platforms. Instead of broadcasting energy broadly, it utilizes highly directional, high-capacity data links. Atmospheric oxygen absorption further limits long-distance propagation, reducing the probability of detection or interception outside the intended path. Adaptive beamforming is the foundational capability that makes this possible, enabling precise energy steering and spatial filtering of interference, and high spatial reuse, so multiple independent links can operate concurrently without overlapping interference. As seen on the slide, the narrow point-to-point math of 60 GHz beams are virtually impossible to detect and extremely difficult to jam.

Speaker #3: They are also frequently required to support real-time coordination, autonomy, and swarm operations. Today's existing drone communications infrastructure is challenged to meet all of these demands.

Speaker #3: 60 gigahertz millimeter-wave technology is designed to enable a fundamentally different solution for modern UAS platforms. Instead of broadcasting energy broadly, it utilizes highly directional, high-capacity data links.

Speaker #3: Atmospheric oxygen absorption further limits long-distance propagation, reducing the probability of detection or interception outside the intended path. Adaptive beamforming is the foundational capability that makes this possible.

Speaker #3: Enabling precise energy steering and spatial filtering of interference, and high spatial reuse so multiple independent links can operate concurrently without overlapping interference. As seen on the slide, the narrow point-to-point math of 60 gigahertz beams are virtually impossible to detect in extremely difficult to jam.

Speaker #3: The highly directional beam makes alignment biojammer difficult, while oxygen attenuation further weakens potential interference signals. Since by definition, the band is unlicensed, 60 gigahertz also avoids interference with licensed spectrum.

Ron Glibbery: The highly directional beam makes alignment by a jammer difficult, while oxygen attenuation further weakens potential interference signals. Since by definition the band is unlicensed, 60 GHz also avoids interference with licensed spectrum. Bringing all of these elements together, this week we expanded our product portfolio with the formal introduction of Peraso's PRM2145. This new jam-resistant communications module is purpose-built for unmanned aerial vehicles, autonomous systems, and defense applications. The PRM2145 leverages our proven 60 GHz platform to deliver secure, ultra-low latency, gigabit class performance in a lightweight, compact form factor optimized for airborne platforms. It is designed to support robust command and control links, high-definition video, ISR data transport, identification friend or foe communications, and drone-to-drone networking. This new module is expected to be available for customer evaluation in Q4, supporting integration across a broad range of unmanned and autonomous platforms.

Speaker #3: Bringing all of these elements together, this week we expanded our product portfolio with the formal introduction of Peraso's PRM 2145. This new jam-resistant communications module is purpose-built for unmanned aerial vehicles, autonomous systems, and defense applications.

Speaker #3: The PRM 2145 leverages our proven 60 gigahertz platform to deliver secure, ultra-low latency, gigabit-class performance in a lightweight, compact form factor optimized for airborne platforms.

Speaker #3: It is designed to support robust command and control links, high-definition video, ISR data transport, identification friend or foe communications, and drone-to-drone networking. This new module is expected to be available for customer evaluation in the fourth quarter, supporting integration across a broad range of unmanned and autonomous platforms.

Speaker #3: We believe the PRM 2145 further strengthens our early-entry position in these high-value ad markets, while also reinforcing our strategy of diversifying Peraso's future growth beyond our core fixed wireless access business.

Ron Glibbery: We believe the PRM2145 further strengthens our early entry position in these high value add markets, while also reinforcing our strategy of diversifying Peraso's future growth beyond our core fixed wireless access business. Turning to slide 8. Before my concluding remarks, I want to briefly highlight one other real-world application and opportunity that we are actively engaged in development of with a prospective customer. Today, the current landscape within defense tactical communications is rapidly driving the evolution of next-generation solutions. One real-time example of this is hybrid UAV networks. In these architectures, 60 GHz communications links are combined with other transport layers, such as satellite backhaul or selective fiber, to deliver high capacity, low latency connectivity while still maintaining the intended stealth and anti-jamming benefits of millimeter wave technology.

Speaker #3: Turning to slide 8, before my concluding remarks, I want to briefly highlight one other real-world application and opportunity that we are actively engaged in developing with a prospective customer.

Speaker #3: Today, the current landscape within defense and tactical communications is rapidly driving the evolution of next-generation solutions. One real-time example of this is hybrid UAV networks.

Speaker #3: In these architectures, 60 gigahertz communications links are combined with other transport layers such as satellite backhaul or selective fiber to deliver high-capacity, low-latency connectivity while still maintaining the intended stealth and anti-jamming benefits of millimeter-wave technology.

Speaker #3: As visualized on this slide, this hybrid approach allows operators to optimize a complete end-to-end network for range, resilience, and mission flexibility in contested or GPS-denied environments.

Ron Glibbery: As visualized on this slide, this hybrid approach allows operators to optimize a complete end-to-end network for range, resilience, and mission flexibility in contested or GPS-denied environments. I wanted to briefly share this example of a hybrid UAV network on today's call for two reasons. First, it reflects the type of advanced system design work that we're actively collaborating with partners to solve and work toward bringing to market. Second, I believe it further illustrates the expanding role of 60 GHz can play beyond traditional point-to-point or fixed wireless use cases. In closing, our near-term focus remains firmly on the areas within the company's control. We continue to take steps to strengthen the resilience of our supply chain and reduce single supplier bottlenecks, while also reducing to secure additional distribution partners that will expand the market reach of our 60 GHz millimeter wave portfolio.

Speaker #3: I wanted to briefly share this example of a hybrid UAV network on today's call for two reasons. First, it reflects the type of advanced system design work that we are actively collaborating with partners to solve and work toward bringing to market.

Speaker #3: And second, I believe it further illustrates the expanding role 60 gigahertz can play beyond traditional point-to-point or fixed wireless use cases. In closing, our near-term focus remains firmly on the areas within the company's control.

Speaker #3: We continue to take steps to strengthen the resilience of our supply chain and reduce single-supplier bottlenecks, while also working to secure additional distribution partners that will expand the market reach of our 60-gigahertz millimeter-wave portfolio.

Speaker #3: Our highest priority is driving commercial traction—converting existing customer engagements, proof of concepts, and technology demonstrations into design wins, purchase orders, and production revenue that can support renewed top-line growth.

Ron Glibbery: Our highest priority is driving commercial traction, converting existing customer engagements, proof of concepts, and technology demonstrations into design wins, purchase orders, and production revenue that can support renewed top-line growth. While near-term visibility, particularly within fixed wireless access, remains limited due to external market dynamics and irregular order patterns, the breadth of our current engagements and the growing recognition of 60 GHz differentiated capabilities makes us optimistic for the future. With that, I'll turn the call over to Jim for a detailed review of the financial results for the quarter.

Speaker #3: While near-term visibility, particularly within fixed wireless access, remains limited due to external market dynamics and irregular order patterns, the breadth of our current engagements and the growing recognition of 60 gigahertz differentiated capabilities make us optimistic for the future.

Speaker #3: With that, I'll turn the call over to Jim for a detailed review of the financial results for the quarter.

Speaker #1: Thank you, Ron. Turning to the results for the quarter, total net revenue for the second quarter was $1.3 million, compared with $1 million for the prior quarter and $2.2 million for the second quarter of 2025.

Jim Sullivan: Thank you, Ron. Turning to the results for the quarter. Total net revenue for the second quarter was $1.3 million, compared with $1 million for the prior quarter and $2.2 million for the second quarter of 2025. Product revenue in the second quarter was $1.2 million, compared with $0.7 million in the prior quarter and $2.2 million in the second quarter of 2025. The sequential increase in product revenue for the second quarter of 2026 was attributable to higher shipments of millimeter wave products. Sales of our legacy memory and related products were less than $25,000 in each of the first two quarters of 2026. We recorded no sales of legacy memory and related products in the second quarter of 2025. Gross margin was 63.7% in the second quarter, compared with 61.5% in the prior quarter and compared with 48.3% in the year ago quarter.

Speaker #1: Product revenue in the second quarter was $1.2 million, compared with $0.7 million in the prior quarter and $2.2 million in the second quarter of 2025.

Speaker #1: The sequential increase in product revenue for the second quarter of 2026 was attributable to higher shipments of millimeter-wave products. Sales of our legacy memory and related products were less than $25,000 in each of the first two quarters of 2026.

Speaker #1: We recorded no sales of legacy memory and related products in the second quarter of 2025. Gross margin was 63.7% in the second quarter, compared with 61.5% in the prior quarter and compared with 48.3% a year ago quarter.

Speaker #1: The sequential increase for the second quarter of 2026 was primarily attributable to millimeter-wave product mix, including increased sales of inventory written down in prior periods, as partially offset by a decrease in non-recurring engineering services, or NRE, revenue.

Jim Sullivan: The sequential increase for the second quarter of 2026 was primarily attributable to millimeter wave product mix, including increased sales of inventory written down in prior periods, as partially offset by a decrease in non-recurring engineering services or NRE revenue. The year-over-year increase was primarily attributable to an increase in NRE revenue and millimeter wave product mix, combined with an increase in sales of inventory written down in prior periods, as partially offset by a decrease in sales of memory and related products. GAAP operating expenses for the second quarter of 2026 were $3.1 million, consistent with the prior quarter and compared with $2.9 million in the second quarter of 2025. Non-GAAP operating expenses, which exclude stock-based compensation, were $2.9 million in the second quarter, consistent with the prior quarter and compared with $2.7 million in the second quarter of 2025.

Speaker #1: The year-over-year increase was primarily attributable to an increase in NRE revenue and millimeter-wave product mix, combined with an increase in sales of inventory written down in prior periods, as partially offset by a decrease in sales of memory and related products.

Speaker #1: GAAP operating expenses for the second quarter of 2026 were $3.1 million, consistent with the prior quarter, and compared with $2.9 million in the second quarter of 2025.

Speaker #1: Non-GAAP operating expenses, which exclude stock-based compensation, were $2.9 million in the second quarter, consistent with the prior quarter and compared with $2.7 million in the second quarter of 2025.

Speaker #1: Our recent non-GAAP operating expenses level of approximately $2.9 million per quarter continues to reflect the benefits realized from previously implemented cost reductions and our ongoing cost containment initiatives.

Jim Sullivan: Our recent non-GAAP operating expenses level of approximately $2.9 million per quarter continues to reflect the benefits realized from previously implemented cost reductions and our ongoing cost containment initiatives. GAAP net loss for the second quarter of 2026 was $2.2 million, or a loss of $0.16 per share, compared with a net loss of $2.5 million, or a loss of $0.22 per share in the prior quarter, and compared with a net loss of $1.8 million or a loss of $0.31 per share in the same quarter a year ago. Non-GAAP net loss, which excludes stock-based compensation and changes in fair value of warrant liabilities for the second quarter of 2026, was $2.1 million, or a loss of $0.15 per share.

Speaker #1: GAAP net loss for the second quarter of 2026 was 2.2 million dollars, or a loss of 16 cents per share, compared with a net loss of 2.5 million dollars, or a loss of 22 cents per share in the prior quarter, and compared with a net loss of 1.8 million dollars, or a loss of 31 cents per share in the same quarter a year ago.

Speaker #1: Non-GAAP net loss, which excludes stock-based compensation and changes in fair value of warrant liabilities, for the second quarter of 2026 was 2.1 million dollars, or a loss of 15 cents per share, this compared with a non-GAAP net loss of 2.3 million dollars, or a loss of 20 cents per share in the prior quarter, and a net loss of 1.7 million dollars, or a loss of 28 cents per share in the same quarter a year ago.

Jim Sullivan: This compared with a non-GAAP net loss of $2.3 million, or a loss of $0.20 per share in the prior quarter, and a net loss of $1.7 million or a loss of $0.28 per share in the same quarter a year ago. The weighted average number of basic and diluted shares outstanding for purposes of calculating both GAAP and non-GAAP EPS for the second quarter of 2026 was approximately 14.1 million shares. Adjusted EBITDA, which we define as GAAP and net income or loss as reported, excluding stock-based compensation, change in fair value of warrant liabilities, interest expense, depreciation and amortization, and the provision for income taxes, was -$2 million in the second quarter of 2026, compared with -$2.3 million in the prior quarter and -$1.6 million in the second quarter of 2025.

Speaker #1: The weighted average number of basic and diluted shares outstanding for purposes of calculating both GAAP and non-GAAP EPS for the second quarter of 2026 was approximately 14.1 million shares.

Speaker #1: Adjusted EBITDA, which we define as GAAP net income or losses reported, excluding stock-based compensation, change in fair value of warrant liabilities, interest expense, depreciation and amortization, and the provision for income taxes, was negative $2 million in the second quarter of 2026, compared with negative $2.3 million in the prior quarter and negative $1.6 million in the second quarter of 2025.

Speaker #1: With regard to the balance sheet, as of June 30, 2026, the company had approximately 3.3 million dollars of cash, compared with 2.7 million dollars as of March 31, 2026.

Jim Sullivan: With regard to the balance sheet, as of 30 June 2026, the company had approximately $3.3 million of cash, compared with $2.7 million as of 31 March 2026. The net increase of approximately $0.6 million in the company's cash balance at quarter end reflected approximately $2.4 million of net proceeds from sales under the company's at-the-market offering program during the second quarter of 2026. As of today's call, the company has approximately 15.1 million shares of common stock and exchangeable shares outstanding. As previously disclosed, the company has been exploring potential strategic alternatives, including a merger sale of assets or other similar transactions, as well as various potential sources of additional capital. On 30 June 2026, the company entered into a committed equity facility with Rock Principal Investments.

Speaker #1: The net increase of approximately 0.6 million dollars in the company's cash balance at quarter end reflected approximately 2.4 million dollars of net proceeds from sales under the company's at-the-market offering program during the second quarter of 2026.

Speaker #1: As of today's call, the company has approximately 15.1 million shares of common stock and exchangeable shares outstanding. As previously disclosed, the company has been exploring potential strategic alternatives, including a merger, sale of assets, or other similar transactions, as well as various potential sources of additional capital.

Speaker #1: On June 30, 2026, the company entered into a committed equity facility with ROC Principle Investments. This facility allows, but does not obligate, the company to issue and sell up to $25 million of shares of its common stock.

Jim Sullivan: This facility allows, but does not obligate the company to issue and sell up to $25 million of shares of its common stock. In addition to providing access to additional working capital for general corporate purposes, the facility is expected to support continued product development targeting expanded opportunities in drone, defense, and tactical communications markets. Independent of the newly entered equity facility, we don't have any updates to share today in the company's broader strategic review process. As Ron Glibbery previously mentioned, overall visibility into future near-term demand remains challenging due to the irregular order patterns from our fixed wireless access customers. Due to insufficient visibility, we will not be providing quarterly guidance on today's call. This concludes our prepared remarks, and we thank you for your time this afternoon. Operator, please commence the Q&A session.

Speaker #1: In addition to providing access to additional working capital for general corporate purposes, the facility is expected to support continued product development targeting expanded opportunities in drone, defense, and tactical communications markets.

Speaker #1: Independent of the newly entered equity facility, we don't have any updates to share today on the company's broader strategic review process. As Ron previously mentioned, overall visibility into near-term future demand remains challenging due to the irregular order patterns from our fixed wireless access customers.

Speaker #1: Due to insufficient visibility, we will not be providing quarterly guidance on today's call. This concludes our prepared remarks, and we thank you for your time this afternoon.

Speaker #1: Operator, please commence the Q&A session.

Speaker #2: Certainly. Everyone at this time will be conducting a question-and-answer session. If you have any questions or comments, please press star 1 on your phone at this time.

Operator 2: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speaker phone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Thank you. Your first question's coming from Jon Hickman from Ladenburg. Your line is live.

Operator: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speaker phone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Thank you. Your first question's coming from Jon Hickman from Ladenburg. Your line is live.

Speaker #2: We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. And once again, if you have any questions or comments, please press star 1 on your phone.

Speaker #2: Please hold while we poll for questions. Thank you. Your first question is coming from John Hickman from Leidenburg. Your line is live.

Speaker #3: Hello. Hey, can you hear me okay, Jim?

Jon Hickman: Hello. Can you hear me okay, Jim?

Speaker #4: Yes.

Speaker #3: Ron? Yeah, you can hear me okay? Okay. So this new communications strategy—who did you say you're partnering with again, that you're working with to design for the factory floor and UAVs and all that?

Operator 2: Yes.

Ron Glibbery: Yes.

Jon Hickman: Ron? Yeah, you can hear me okay. Okay. This new communications strategy, who did you say your partner was again that you're working with to design for the factory floor and UAVs and all that? Or do-

Speaker #3: Or did.

Speaker #4: I was referring to the final slide.

Ron Glibbery: Are you referring to the final slide?

Speaker #3: No, the second. The second. No, it was the third to the last one. It showed all the robots and stuff.

Jon Hickman: No, the second.

Jon Hickman: No, it's the third to the last one. Showed all the robots and stuff.

Speaker #4: Yeah, well, that again is obviously still confidential, John. But the concept there is—I think what's really insightful about that situation is that, in the case—and you've seen this a lot in the US as well as China—with humanoid robots, which basically have full freedom, the models are complicated.

Ron Glibbery: Well, that, again, it's obviously still confidential, John, but the concept there is I think what's really insightful about that situation is that, and you're seeing this a lot in the US as well as China, with humanoid robots, which basically have full freedom, the models are complicated. It turns out the data flow between the network and these humanoid robots is substantial. That's where our chips come into play. If you look at that, I love that slide because actually that slide just shows you the benefit of our technology over traditional wireless technology, which is that we have a very narrow beam, very physically limited area of operation versus traditional wireless, which has very wide field of operation, and that's why we win in those circumstances. We really see that market as an important emerging market because of that capability of our technology.

Speaker #4: So it turns out the data flow between the network and these humanoid robots is substantial. That's where our chips come into play. And if you look at that, I love that slide because actually that slide just shows you the benefit of our technology over traditional wireless technology, which is that we have a very narrow beam very, very physically limited area of operation versus traditional wireless, which has very wide field of operation.

Speaker #4: And that's why we went in, in those circumstances. So we really see that market as an important emerging market because of the capability of our technology.

Speaker #4: So I hope that slide got the message across. I think it did. But, I mean, that's really the concept behind it.

Ron Glibbery: I hope that slide got the message across. I think it did. I mean, that's really the concept behind it.

Speaker #3: You said you'd have chips available for people to experiment with or see if they work in by the end of the year, in the fourth quarter?

Jon Hickman: You said you would have chips available for people to experiment or see if they work by the end of the year, in Q4?

Speaker #4: No, no. Our chips are no, no. What we meant to say was our chips are available now. The only concern about we overall, we have run into an issue we've seen this with other companies whereby the availability of third-party memory like DDR4, DDR5 is limiting sales.

Ron Glibbery: No. What we meant to say was our chips are available now. The only concern about Q-- Overall, we have run into an issue, we have seen this with other companies, whereby the availability of third-party memory, like DDR4, DDR5, is limiting sales and making orders kind of lumpy. That is what I was referring to. As far as the silicon for that application, we are in full production, and it is available today.

Speaker #4: And making orders kind of lumpy. So that's what I was referring to. As far as the silicon for that application, we are in full production and it's available today.

Speaker #3: So what were you talking about when you said you would have chips available for in the fourth quarter?

Jon Hickman: What were you talking when you said you would have chips available for-

Ron Glibbery: Oh

Jon Hickman: in Q4 for-

Speaker #4: Right. We have a new yes, we have a new module product based on our existing silicon. And the new module, we did a press release yesterday and that's called the PRM 2145.

Ron Glibbery: Yes. We have a new module product based on our existing silicon. The new module, we did a press release yesterday, and that is called the PRM2145.

Speaker #4: And I think that's what—so that's a new module. I'll have to go to our website to see the specific technical details.

Jon Hickman: Yeah.

Ron Glibbery: That is a new module with some You will have to go to our website to see the specific technical details. But basically, it is another part of our module family based on our existing silicon. Of course, the significant change to that particular product is, again, a new antenna, which we design in-house ourselves. We have got the ability to change the antenna to provide different RF characteristics.

Speaker #4: But basically, it's another part of our module family, based on our existing silicon, of course. The significant change to that particular product is, again, a new antenna which we design in-house.

Speaker #4: Ourselves. So we've got the ability to change the antenna to provide different character RF characteristics.

Speaker #3: Okay. And then you've been working with some partner, I think in Israel, on the friendly fire thing for a while now—more than a year.

Jon Hickman: Okay. You have been working with some partner, I think in Israel, on the friendly fire thing for a while now, more than a year.

Speaker #3: So are you generating revenues there?

Ron Glibbery: Yes.

Jon Hickman: Are you generating revenues there?

Speaker #4: Well, we definitely have generated revenue there. Substantial revenue—seven-figure revenue—from two perspectives. One perspective is from an engineering perspective, and we actually have shipped volume. Generally, I would say what we're seeing is originally that business, and still is, based on what we call infantry.

Ron Glibbery: Well, we definitely have generated revenue there, substantial revenue, seven-figure revenue, from two perspectives. One perspective is from an engineering perspective, and we actually have shipped volume. Generally, I would say what we are seeing is, originally, that business, and still is based on what we call infantry. But actually, we are starting to see a shift over to the drone application as well. Just, you can imagine the need for friendly fire in circumstances where you have got a drone and infantry on the ground, and the drone wants to make 100% sure that it is not targeting ground personnel. So it is really an evolution of that model, from kind of ground-based communications to aerial-based communications. We are starting to see that transition, and we really do anticipate more volume from that customer over the next few quarters.

Speaker #4: But actually, we're starting to see a shift over to the drone application as well. So just you can envision you can imagine the need for friendly fire in circumstances where you've got a drone and infantry on the ground.

Speaker #4: And the sure that it's not targeting ground personnel. So it's really an evolution of that model. From kind of ground-based communications to aerial-based communications.

Speaker #4: So we're starting to see that transition. And we really do anticipate more volume from that customer over the next few quarters.

Speaker #3: So this issue of drones being jammed or they're in a communications interrupted. To make them ineffective. So theoretically, every drone should have millimeter microwave on it so that it can't have.

Jon Hickman: This issue of drones being jammed or their communication interrupted to make them ineffective.

Ron Glibbery: Yeah.

Jon Hickman: Theoretically, every drone should have millimeter microwave on it so that it cannot happen.

Speaker #4: Yeah, theoretically. And, frankly speaking, that again—that is a core value proposition. So, from our perspective, we've always had this capability. What's changed over the last year, John, is the fact that traditional wireless technology that was used to control a drone now is getting jammed by the enemy.

Ron Glibbery: Yeah, theoretically. And frankly speaking, again, that is a core value proposition. From our perspective, we have always had this capability. What has changed over the last year, John, is the fact that traditional wireless technology that was used to control drones now is getting jammed by the enemy.

Speaker #4: So we, frankly, see our really our technology potentially going and we have to keep in mind, this is really more for military and security applications.

Jon Hickman: Yeah.

Ron Glibbery: We frankly see our technology potentially going. We have to keep in mind, this is more for military and security applications where the user wants to avoid being jammed by the enemy. Obviously, if you just find a drone at a wedding and you want to take some pictures, I mean, not necessarily a requirement for anti-jamming. But frankly, for military and security applications, we are seeing very strong interest there, and you are going to see a lot of announcements from us over the next few weeks and months. As a matter of fact, that was the announcement we made yesterday, was a specific new module for the drone application. We see it as a very important part of the drone rollout over the coming years.

Speaker #4: Where the user wants to avoid being jammed by the enemy. Obviously, if you're just flying a drone at a wedding and you want to take some pictures, I mean, not really necessarily a requirement for anti-jamming.

Speaker #4: But frankly, for military and security applications, we're seeing very, very strong interest there and you're going to see a lot of announcements from us over the next few weeks and months.

Speaker #4: And as a matter of fact, that was the announcement we made yesterday was a specific new module for the drone application. So we see it as a very, very important part of the drone rollout over the coming years.

Speaker #3: So, can you—so it's kind of a defensive technology. You're preventing communications interruptions on the drone. Can you turn it around and make it offensive?

Jon Hickman: It is kind of a defensive technology. You are preventing communications interruptions on the drone. Can you turn it around and make it an offensive, like use it to more precisely interrupt other people's drones, or is that not a-

Speaker #3: Like, use it to more precisely interrupt other people's drones? Or is that not a—

Speaker #4: No, I would say it's really more command and control. I mean, really the two primary applications are the friendly fire, which I described, whereby the drone can determine whether the ground personnel or ground devices are friend or foe.

Ron Glibbery: No, I would say-

Jon Hickman: Is that crazy?

Ron Glibbery: it's really more command and control. Really, the two primary applications are the friendly fire, which I described, whereby the drone can determine whether the ground personnel or ground devices are friend or foe. But of course, the other application is command and control of the drone. Your definition of defensive or offensive is kind of up to you. But yeah, we do have the ability eventually to also detect drones, but we're not doing that today. In other words, kind of a radar applications. But really the focus for us right now with our existing technology is command and control for the drone application. And with the concept that I would say very, very difficult to jam our link. And I hope our slides today really communicated that concept.

Speaker #4: But of course, the other application is command and control—of the drone. So, your definition of defensive or offensive is kind of up to you.

Speaker #4: But yeah, right. We don't— We do have the ability, eventually, to also detect drones, but we're not doing that today. In other words, it's kind of a radar application, but really the focus for us right now, with our existing technology, is command and control for the drone application.

Speaker #4: And with the concept that we it's very I would say very, very difficult to jam our link. And I hope our slides today really communicated that concept.

Speaker #3: Well, how are you getting yourself noticed? On the military side.

Jon Hickman: Well, how are you getting yourself noticed, like in the military thing?

Speaker #4: Well, yeah, that's a very good question. So basically, we're really traditional. We do, in this stage, in America, we've got some terrific partners that are helping us in that regard.

Ron Glibbery: Yeah, that's a very good question. So basically, really traditional, in the States, in America, we've got some terrific partners that are helping us in that regard, and that's still under confidentiality. We're actually, to be frank, we've been accepted by a NATO consortium that's actually promoting technology in NATO-based countries. And that's actually been a very, very strong channel for us to get recognized by drone manufacturers, is probably our primary channel right now for engagements. I would say, just off the top of my head, we are, for the last 2 to 3 months, engaging with new drone customers, and I mean design wins on a weekly basis. So the exposure is very, very good through NATO, for example. We do attend trade shows and have traditional marketing channels, but the NATO alliance has been very helpful for us.

Speaker #4: And that's still under confidentiality. We're actually to be frank, we've been accepted by a NATO consortium that's actually promoting technology in NATO-based countries. And that's actually been a very, very strong channel for us to get recognized by these by drone manufacturers.

Speaker #4: It's probably our primary channel right now for engagements. I would say, just off the top of my head, we are, for the last two to three months, engaging with new drone customers—and I mean designers—on a weekly basis.

Speaker #4: So, the exposure is very, very good through NATO, for example. We do attend trade shows and have traditional marketing channels, but the NATO alliance has been very, very helpful for us.

Speaker #4: So there's been a variety of methods that we're undertaking to really get ourselves and obviously, as the word gets out that our technology can be used for for jam-resistant communications, that really spreads the word as well.

Ron Glibbery: There's been a variety of methods that we're undertaking to really get ourselves known. And obviously as the word gets out that our technology can be used for jam-resistant communications, that really spreads the word as well, and that helps our communication. We really do find that we're getting more and more inquiries on a weekly basis.

Speaker #4: And that helps our communications. So we really do find that we're getting more and more increase on a weekly basis.

Speaker #3: So, just one more question there. Some of these drone manufacturers are making thousands a week or a month. If somebody wants that kind of volume, can you do that?

Jon Hickman: Just one more question there.

Ron Glibbery: Sure.

Jon Hickman: If some of these drone manufacturers are making thousands a week or a month,

Ron Glibbery: Right. Yep.

Jon Hickman: If somebody wants that kind of volume, can you do that?

Speaker #4: Yeah. I mean, today I would say our capacity is about 30,000 to 50,000 units a month. But obviously, we've kind of achieved that in the past.

Ron Glibbery: Yeah. Today I would say our capacity is about 30,000 to 50,000 units a month. But obviously, we have kind of achieved that in the past. I would say we would have no problem getting to 100,000 units a month. Our primary silicon supplier is TSMC, which for them, that is kind of peanuts. I think with our other suppliers, it is just a matter of time before we can get to those volumes. We are not worried about achieving those volumes from an operational perspective.

Speaker #4: I would say we would have no problem getting to 100,000 units a month. So our primary silicon supplier is TSMC. Which for them, that's kind of peanuts.

Speaker #4: And I think with other suppliers, it's just a matter of time before we can get to those volumes. So we're not worried about achieving those volumes from an operational perspective.

Speaker #3: Be a nice problem to have. Okay, thank you.

Jon Hickman: Be a nice problem to have. Okay. Thank you.

Speaker #4: Yeah. Thank you, John, very much.

Ron Glibbery: Yeah. Thank you, John, very much.

Ron Glibbery: Yeah. Thank you, Jon, very much.

Speaker #3: All right. Bye.

Jon Hickman: All right. Bye.

Speaker #2: Thank you. Your next question is coming from Kevin Liu from K Liu and Company. Your line is live.

Operator 2: Thank you. Your next question is coming from Kevin Liu, from K. Liu & Company. Your line is live.

Operator: Thank you. Your next question is coming from Kevin Liu, from K. Liu & Company. Your line is live.

Speaker #5: Hi. Good afternoon. Maybe just a couple of follow-ons on the defense opportunities that you have. Can you talk about the pipeline and more specifically how soon do you think you can kind of get the second and third production customer?

Kevin Liu: Hi, good afternoon.

Ron Glibbery: Hi.

Kevin Liu: Maybe just a couple of follow-ons on the defense opportunities that you have. Can you talk about

Ron Glibbery: Yeah

Kevin Liu: the pipeline, and more specifically, how soon do you think you can kind of get the second and third production customer? Is that a couple quarters out? Is that longer term? For the hybrid UAV network that you referenced, was curious if there are any specific LEO partners that you can name there?

Speaker #5: Is that a couple of quarters out? Is that longer term? And then for the hybrid UAV network that you referenced, was curious if there are any specific LEO partners that you can name there?

Speaker #4: For the first part of your question, Kevin, I mean, actually, it turns out there's been a very there's kind of a very interesting development, which is that obviously, we're targeting drone manufacturers, but we are seeing actually traction in a related business, which is actually fixed wireless communications, but secure fixed wireless communications.

Ron Glibbery: For the first part of your question, Kevin, actually, it turns out there's a very interesting development, which is that obviously we're targeting drone manufacturers, but we are seeing actually traction in a related business, which is actually like fixed wireless communications, but secure fixed wireless communications. It turns out that some of the customers who are actually providing drone communications also would like us to provide communications on the ground. We could see those shipments starting really in Q4. That's very exciting. I think the drone specifically will be Q1, Q2 next year, but I actually am hoping that the whole concept of secure communications is just a very, very important concept. Again, we tried to make it clear in the slides today, but our ability to avoid jamming is just very fundamental.

Speaker #4: So it turns out that some of the customers who are actually providing drone communications also would like us to provide communications on the ground.

Speaker #4: And we could see those shipments starting really in Q4. So that's very exciting. I think the drone specifically will be Q1, Q2 next year.

Speaker #4: But I actually am hoping that the whole concept of secure communications is just a very, very important concept. And again, I mean, we tried to make it clear in the slides today, but our ability to avoid jamming is just very fundamental.

Speaker #4: It just basically boils down to a very, very narrow beam, and very directional—directional and dynamic. All those things add up to make the whole communications channel very, very difficult to detect and to jam.

Ron Glibbery: It just basically boils down to very, very narrow beam and very directional. Directional and dynamic. All those things add up to make the whole communications channel very, very difficult to detect and to jam. I would say we could start shipping in lower volumes even later this year. That's really our target. But I'm thrilled to say that the momentum certainly on defense manufacturers overall is turning out to be very positive for us. The second part of your question is again, and without getting specific, one of the opportunities we're specifically working on, and I find this very interesting. In a certain battlefield environment, and I can't say where, there is a model whereby a LEO satellite provider can provide a link to a control drone, call it, and that control drone can manage client drones.

Speaker #4: So I would say there's we could start shipping in lower volumes even later this year. And so that's really our target. But I'm thrilled to say that the momentum certainly on defense manufacturers overall is turning out to be very, very positive for us.

Speaker #4: Now, the second part of your question is, once again, and without getting specific, one of the opportunities we're specifically working on. I find this very, very interesting.

Speaker #4: In a certain battlefield environment, and I can't say where, there is a model whereby a LEO satellite provider can provide a link to a controlled drone, call it.

Speaker #4: And that controlled drone can manage kind of client drones. And so what that means is the drone operator can be really anywhere. You can be anywhere in the globe.

Ron Glibbery: What that means is the drone operator can be really anywhere. You can be anywhere in the globe and really see a real-time, first-person video depiction of those client drones. You can do the math on how many LEO operators there are in the world. But certainly that's one of the applications we're working on, is that specific scenario where the actual pilot of the drone is nowhere near the battlefield and using the LEO environment to actually can control the client drones. That's a really interesting application for us. So we're working on that kind of in real-time. That's probably as much as I could say at this time. But certainly suffice it to say that that's an application that people are very intrigued about.

Speaker #4: And really see a real-time first-person video depiction of those client drones. And so you can do the math on how many LEO operators there are in the world.

Speaker #4: But certainly, we're starting that's one of the applications we're working on is that specific scenario where the actual pilot of the drone is nowhere near the battlefield and using the LEO environment to actually control the client drone.

Speaker #4: So that's a really interesting application for us. So we're working on that kind of in real time, so that's probably as much as I can say at this time.

Speaker #4: But certainly, suffice it to say that that's an application that people are very, very intrigued about.

Speaker #5: Yeah. Just one quick follow-on on that point is with all these new things that you guys are working on, how quickly can you actually get these things to the battlefield?

Kevin Liu: Yeah. Just one quick follow-on that point is, with all these new things that you guys are working on, how quickly can you actually get these things to the battlefield? Are these all products that are contemplated for kind of the current conflicts that are ongoing, or are these more so kind of next-generation technologies where it could take a year or more for them to really get into production?

Speaker #5: Are these all products that are contemplated for kind of the current conflicts that are ongoing? Or are these more so kind of next-generation technologies, where it could take a year or more for them to really get into production?

Speaker #4: You know, Kevin, I think it's going to be phased. And, frankly, again—I mean, going back to my earlier comments to John—I can see us starting to ship literally later this year on ground-based applications.

Ron Glibbery: Kevin, I think it's going to be phased. Frankly, again, I'm going back to my earlier comments to John. I can see us starting to ship literally later this year on ground-based applications. Just to give you an example, some of our customers are providing radar, and they need communications like data links to their radar units, and the radar units need to be secure. You can see a situation where we could be shipping. There's very little development that has to take place because it's really like a point-to-point applications for fixed wireless access, as it turned out. It just turns out it's secure. There may be a few more bells and whistles, but I can see us starting later this year. Look, if we're talking about a very sophisticated swarm, I think swarm drones in particular is a complex problem.

Speaker #4: So just to give you an example, there are some of our customers that are providing radar, and they need communications like data links to their radar units.

Speaker #4: And the radar units need to be secure. So you can see a situation where we could be shipping this very, very little development that has to take place because it's really like our point-to-point applications for fixed wireless access as it turned out.

Speaker #4: It just turns out it’s secure. There may be a few more bells and whistles, but I can see us starting later this year, I think. I mean, if we’re talking about a very, very sophisticated kind of swarm—I think swarm drones, in particular, is a complex problem.

Speaker #4: We're probably a year away from that. But there's no doubt in my mind we'll start shipping later this year, early Q1, and then just ramp it up from there.

Ron Glibbery: We're probably a year away from that, but there's no doubt in my mind we'll start shipping later this year or early Q1 and then just ramp it up from there.

Speaker #5: I appreciate that. Maybe switching gears a little bit onto more your traditional fixed wireless business. I certainly understand some of the challenges your customers are going through and why they're holding off on purchases.

Kevin Liu: Yeah, I appreciate that. Maybe switching gears a little bit onto more your traditional fixed wireless business. I certainly understand some of the challenges your customers are going through and why they're holding off on purchases. I'm curious what you're hearing from them in terms of where their inventory levels are with your chips. When they do start to reorder again, are you expecting kind of a big ramp-up as they restock pretty fully, or do you think it's kind of a more gradual uptick?

Speaker #5: I'm curious what you're hearing from them in terms of where their inventory levels are with your chips. And when they do start to reorder again, are you expecting kind of a big ramp-up as they restock pretty fully, or do you think it's kind of a more gradual uptick?

Speaker #4: I'm going to share some insight with you, Kevin, that I've had even over the last few days, which is that, even though there's a lot of buzz on the military side of things, on the fixed wireless side, we've had three major customer opportunities arise.

Ron Glibbery: I'm going to share some insight with you, Kevin, that even over the last few days, which is that even though there's a lot of buzz on the military side of things, on the fixed wireless side, we've had three major customer opportunities arise very recently, including, believe this was very good news for us. It's one of the largest OEMs in India now. It feels like they'd like to start shipping our technology in India, which is obviously a tremendous market, a Middle Eastern customer, as well as a large OEM. The message from all of those potential customers is that they're seeing traction. I think with regards to our own customers, I'm going to let Jim kind of answer in terms of specifics, but we actually are starting to see reorders from some customers. We're starting to see that turnaround.

Speaker #4: Very, very recently, including believe this was very, very good news for us is one of the largest OEMs in India now feels like they're going to they'd like to start shipping our technology in India, which is obviously a tremendous market.

Speaker #4: Middle Eastern customer, as well as a large OEM. So, the message from all of those potential customers is that they're seeing traction. I think with regards to our own customers—I'm going to let Jim kind of answer in terms of specifics—but we are actually starting to see reorders from some customers.

Speaker #4: So we're starting to see that turnaround. We're hoping—we know for sure in Q4—we're going to start to see that turnaround. In terms of what we can share globally, Jim can speak to that more specifically.

Ron Glibbery: Well, we know for sure in Q4 we are going to start to see that turnaround. In terms of what we can share globally, Jim can speak to that more specifically. I think the good news, and certainly what I have seen even over the last week, is we are getting real momentum from new customers. I am talking very large opportunities in India and the Middle East, as well as a new OEM partner. We are hoping by Q4 we really overcome this memory situation. By the way, one of the key points I think that our customers are trying to do on the memory side of things is kind of switching to DDR3. One of the problems is the AI customers broadly are using DDR4, DDR5, which is very high speed. Luckily, in most cases, our customers can get away with DDR3.

Speaker #4: But we really I think the good news and certainly what I've seen even over the last week is we're getting real momentum from new customers.

Speaker #4: And I'm talking about very large opportunities in India, in the Middle East, as well as a new OEM partner. And we're hoping that by Q4, we really overcome this memory situation.

Speaker #4: But by the way, one of the key points I think our customers are trying to address on the memory side of things is kind of switching to DDR3.

Speaker #4: I mean, so one of the problems is the AI customers broadly are using DDR4, DDR5, which is very, very high speed. But luckily, in most cases, our customers can get away with DDR3 source starting to see that transition, which we are hoping by Q3 will alleviate some of this pressure.

Ron Glibbery: We are starting to see that transition, which we are hoping by Q3 will alleviate some of this pressure.

Speaker #5: All right, great. One last one, perhaps for Jim. Just—it doesn't sound like it, but I'm curious—with the Roth equity facility that you guys secured after quarter-end.

Kevin Liu: All right, great. One last one perhaps for Jim. It does not sound like it, but curious with the Rock equity facility that you guys secured after quarter end, did you guys tap into that at all, or is that still fully available to you?

Speaker #5: Did you guys tap into that at all, or is that still fully available to you?

Speaker #3: No, we have not tapped into the Roth facility or used our ATM facility. Since, I think, yeah, since June 30th. I think we had some trades under the ATM—maybe settled on July 1.

Jim Sullivan: No, we have not tapped into the Rock facility or used our ATM facility since, I think, 30 June. I think we had some trades under the ATM maybe settle on 1 July. No, there has been no activity under either facility. We will have comments, obviously, in the 10-Q regarding our runway and liquidity, et cetera, going forward. Obviously, we have got some market conditions working against us on the fixed wireless side and while a tremendous amount of activity on the drone defense side. I kind of joke with folks, I know there is a lot of activity because a lot of NDAs are crossing my desk when Ron has come back from trade shows, which is always a good sign to me. I have had quite a number of them. There is some good to your comments earlier about the pipeline. We will be looking at that going forward.

Speaker #3: No, there's been no activity under either facility. We'll have comments, obviously, in the 10-Q regarding our runway and liquidity, etc., going forward. Obviously, we've got some market conditions working against us on the fixed wireless side.

Speaker #3: And while a tremendous amount of activity on the drone defense side and I kind of joke with folks, I know there's a lot of activity because a lot of NDAs are crossing my desk when Ron's come back from trade shows, which is always a good sign to me.

Speaker #3: I've had quite a number of them, so there's some good. To your comment earlier about the pipeline, we'll be looking at that going forward.

Jim Sullivan: We will be looking at that going forward. As has been the case and kind of my mantra in past quarters, first and foremost, if we cannot get our products out the door as quickly as we would like based on customer orders, we remain focused on non-recurring engineering services, NRE transactions. I believe Ron and team are working on one right now in the defense space. Generally, those contracts have no incremental cost to us, so it is funded R&D to me that drops to the bottom line. So we have at least one of those that is hopefully as high as mid six figures that we are working. As well, with a number of the programs out there on technology, Ron has been very active in pursuing grants from the Canadian government. Obviously, each country wants to have its independent technology and resources.

Speaker #3: And as has been the case—and kind of my mantra—in past quarters, first and foremost, if we can't get our products out the door as quickly as we'd like, based on customer orders, we remain focused on non-recurring engineering services.

Jim Sullivan: As has been the case and kind of my mantra in past quarters, first and foremost, if we cannot get our products out the door as quickly as we would like based on customer orders, we remain focused on non-recurring engineering services, NRE transactions. I believe Ron and team are working on one right now in the defense space. Generally, those contracts have no incremental cost to us, so it is funded R&D to me that drops to the bottom line. So we have at least one of those that is hopefully as high as mid six figures that we are working. As well, with a number of the programs out there on technology, Ron has been very active in pursuing grants from the Canadian government. Obviously, each country wants to have its independent technology and resources.

Speaker #3: NRE, transactions, I believe Ron and team are working on one right now on the defense space. In generally, those contracts have no incremental cost to us.

Speaker #3: So it's funded R&D to me that drops to the bottom line. So we've got at least one of those that's hopefully as high as mid-six figures that we're working as well.

Speaker #3: With a number of the programs out there on technology, Ron's been very active in pursuing grants from the Canadian government. Obviously, each country wants to have its independent technology and resources.

Speaker #3: And while Peraso is a US public company, the majority of Ron and the majority of the team and all the engineers working on our millimeter wave technology sit in Canada.

Jim Sullivan: While Peraso is a US public company, the majority of Ron and the majority of the team and all the engineers working on our millimeter wave technology sit in Canada. So we have been pretty aggressive about applying for those. Time will tell. We have done the data submissions on the administrative side. Ron, led by Alex, our CTO, and Brad, our COO, and our VP of Biz Dev, have done the technical details, provided the specs, et cetera. So, we are optimistic about some of those coming in. Anything I missed there, Ron, on that front?

Speaker #3: So, we've been pretty aggressive about applying for those. Time will tell. We've done the data submissions on the administrative side. Ron, led by Alex, our CTO, and Brad, our COO, and our VP of BizDev, have handled the technical details and provided the specs, etc.

Speaker #3: So we’re optimistic about some of those coming in. Anything I missed there, Ron, on that front?

Speaker #4: No, that was—yeah. No, perfect. Terrific, Jim. Thank you. Yeah.

Ron Glibbery: No, that was it. No. Perfect. Terrific, Jim. Thank you.

Speaker #3: So I'll stop there, Kevin. I don't know if that answered your question.

Jim Sullivan: I will stop there, Kevin. I do not know if that answered your question.

Speaker #5: Yeah, it definitely did. Thanks for taking those questions, and I look forward to seeing some of these defense announcements in the near future.

Kevin Liu: Yeah, it definitely did. Thanks for taking those questions, and look forward to seeing some of these defense announcements in the near future.

Speaker #4: Yeah, for sure.

Speaker #3: Thanks, Kevin.

Ron Glibbery: Yeah, appreciate it.

Jim Sullivan: Thanks, Kevin.

Speaker #2: Thank you. I show that there are no further questions in the queue at this time. That will conclude today's conference call. Thank you for your participation.

Operator 2: Thank you. I show that there are no further questions in the queue at this time. That will conclude today's conference call. Thank you for your participation. You may now disconnect.

Operator: Thank you. I show that there are no further questions in the queue at this time. That will conclude today's conference call. Thank you for your participation. You may now disconnect.

Speaker #2: You may now disconnect.

Ron Glibbery: Thank you.