Announces $4.0 Million Registered Direct Offering
After the close yesterday, Peraso (PRSO) announced that the company has priced a registered direct offering of approximately 5.7 million shares of its common stock at an offering price of $0.70 per share. The offering was priced at-the-market under Nasdaq rules but represents a 28% discount to PRSO’s last close price. In lieu of common stock, the investor may purchase approximately 5.7 million pre-funded warrants at $0.69 per pre-funded warrant with each warrant immediately exercisable at $0.01 per share. Either way, gross proceeds from the offering are expected to be $4.0 million. Peraso has also entered into a concurrent private placement with the same investor in which the company will issue warrants to purchase up to 5,714,286 shares of common stock at an exercise price of $0.70 per share. The private placement warrants have a five-year life and may be exercised beginning at the date of issuance. In conjunction with this offering, Peraso has also agreed to reprice 3,675,000 warrants held by the same investor, Armistice Capital, from the original exercise price of $1.36 to a new exercise price of $1.00 per share.
Considering where shares of PRSO were trading just a couple weeks ago, we are pleased to see the company bolster its balance sheet following the recent run up in the stock. Between this registered direct offering and the company’s cost reduction initiatives entering the year, we believe Peraso has just enough cash to subsist until year-end. Of course, we also remain optimistic that additional non-dilutive capital will be secured in the near future as management previously indicated that a couple of significant non-recurring engineering and licensing agreements could close as early as Q2. Moreover, the pull forward of memory sales ahead of next year’s end-of-life is also likely to boost cash flow in the latter half of the year. We have updated our model to include the higher share count and incremental cash from the offering. As we had already assumed some dilution was forthcoming, our price target remains $1.25, representing an unchanged FY ’23 EV/Sales multiple of 2x.
Our report with model and disclosures is available here.
Disclosure(s):
K. Liu & Company LLC (“the firm”) receives or intends to seek compensation from the companies covered in its research reports. The firm has received compensation from Peraso Inc. (PRSO) in the past 12 months for “Sponsored Research.”
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