Datavault AI Inc.

Good morning and welcome to the WISA Technologies first quarter 2023 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to David Barnard, Investor Relations. Please go ahead.

Thank you, Andrea, and thank you all for joining us today. With us on the call are Brett Moyer, CEO and President, Jeff Oliva, and Mike Bin, SVP of Business Marketing from Comair. Before turning the call over to Brett, I'd like to remind everyone that today's presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting Weiss's business, including current macroeconomic uncertainties associated with the COVID-19 pandemic, our inability to predict or measure supply chain disruptions resulted from the COVID-19 pandemic and other drivers, our ability to predict the timing of design wins entering production and the potential future revenue associated with design wins, rate of growth, the ability of future revenue associated with design wins, and predict customer demand for existing and future products to secure adequate manufacturing capacity, consumer demand conditions affecting customers and markets, the ability to hire, retain, and motivate employees, the effect of competition, including price competition, technological, regulatory, and legal developments, developments in the economy and financial markets, risks and uncertainties affecting the proposed Comair transaction, such as the inability to enter into definitive agreements with respect to the proposed transaction, the expected performance of the Part 2, risk related to receipt of necessary regulatory and shareholder approvals, failure to realize the anticipated benefits from the transaction, the ability of the parties to satisfy various conditions closing the proposed transaction, and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission, including those described in risk factors in our annual report on Form 10-K for the year ended December 31st, 2022, as revised or updated for any changes described in any subsequently filed quarterly reports on Form 10Q and the preliminary and definitive proxy statement or other documents that WISA intends to file with the SEC in connection with the proposed Commer transaction. The information in this presentation is as of the date hereof, and the company undertakes no obligations to update required to do so by law. With that, I'll turn the call over to Brett. Go ahead, Brett.

Thank you, David. And good morning. I'd like to welcome both new investors, old investors, and particularly the CommEar investors today on the call. We will be focusing on our intent to describe the strategy around acquiring CommEar. For the new investors, we're going to do a quick overview on WISA, but I would recommend you either reach out to me to get more detail on WISA strategy or let's listen to one of our prior calls but why is focused on smart devices and getting wireless audio from smart devices into the room around the room around its commercial space to make sure that the consumer gets that immersive audio experience as if they're in the stadium listening watching a live game as if they're in a theater here in the movie itself and all the audio above it behind it to the sides of it right so in the core that we're going after that market and we have a strong portfolio of wireless ip we have an interoperability standard surround under the uh brand weisa we have a pretty broad customer base of tier one consumer electronics customers and weisa has a small product line of speakers under platen audio that's mainly there to drive awareness of WISA certification within the industry, build up WISA stores with the retailers, and drive technology demo success with our new technologies as we launch it. But today, to that portfolio, we'll be adding CommEars Immerse IP and immersive audio techniques for adapting audio to where a listener is where they're sitting, right? Financially, we think it has a strong impact once we've merged the two companies. There's some variability around Q3 and how that impacts us, but starting in Q4 and into 2024, we think the combined impact of the technology investments in the last three years of both companies, the design work of the last three years of both companies drives a revenue boost forecast for 24 in the 10 to 15 million range. So a little bit about WISA for the new investors. Traditionally, we've had a custom chip on modules going into either small hubs, into televisions, into speakers under the WISA HT brand. It's been expensive. Each module is $10 to $12, but it was the highest performing wireless technology industry that even allowed Bang & Olufsen to use it in their $40,000 speaker. But where the investment has gone in the last three years is to take the know-how in IP and WISA-HT and make it portable in IP so that we can load it onto lower-cost, non-custom chips, yet still deliver a higher performance of audio than, any competitors can do. And the first product we launched with our IP in that format was on an expressive chip under the brand of WISA DS. And WISA DS is roughly a quarter the cost of WISA HT. It does a few less channels, but it is extremely powerful in its impact when you add rear speakers to a sound bar with up firing drivers that send the sound above, right? So you'll see that roll out in the Platin Rio product this year. We talked about it last call. There's design wins going on actively with DS and it'll impact revenue this year. The next phase was we took the IP and moved it to a Realtek chip. Now the Realtek chip is a five gigahertz chip. It is more powerful. That'll allow us to give comparable performance and in some cases exceed the performance of WISA HT and we expect to release that product to production in Q3. Finally, the IP, and we showed a small demo prototype at CES of our same WISA-E IP running on a set-top box SOC, which means the IP not only has been demonstrated working on a 2.4 gigahertz IoT module in DS, a 5 gigahertz with real tech for WISA-E, But here it was with a SOC demo for a set-top box where the set-top box was streaming a 2.1 audio signal out to speakers. Not the full home theater suite, but the first step in developing and morphing the YCE into a complete product. We think the total TAM of smart devices that an embedded IP device platform can penetrate is up to a billion units and So we think the strong market we got the best technology position and it's all starting to hit production and revenue this year From a business update on the last call there was a few highlights that we gave you So I'm just going to update those for those that were listening why say II we still believe is a very compelling technology to the industry and It is in beta with the initial customer. When it gets released to production, there's a good list tier one branded companies that are waiting to test and get their hands on it. So that'll start happening in Q3. And when we release the first software to production on the Realtek chip. DS, as I mentioned, is in production. We will launch the sound bar around it under Platinum Audio's brand name called the Rio 5.1.4 sound bar. It'll be at a great price point for the consumer and a good price point for us from a margin perspective. So we look forward to demonstrating to the industry that WISA DS delivers a product that the consumers want. And finally, around WISA marketing, we talked last quarter. We have a We have scaled down the marketing from Q4 to Q1. We are still working it to be highly efficient. So the objective of the marketing program is to drive awareness of WISA certified, WISA stores. We think we'll be announcing another WISA store coming up with a major Midwest retailer in the next month or so. While we're trying to be cost-effective, we are still marketing WISA-certified and WISA products to the industry and the consumer. From an overall industry, we think consumer electronics is in a slump and will continue that way through Q2 and maybe early Q3. We think the impact of overbuilding inventory from the logistical issues during COVID is leading to price erosion and margin compression, and that'll last through the summer. You can see that in your ads. You could hear that in the Sonos calls. Demand is soft, so brands are lowering their price to try to move inventory to get ready for the Christmas season with new products. We did drop operating price expenses from Q4 to Q1 approximately three-quarters of a million dollars, and with the new products going into production in the second half of the year, we still expect to have year-over-year growth. Those new products are both DS, WISA HT designs, and the Platinum Rio designs. Now, with that, before Mike gets started, you know, we're pretty excited about the announcement we put out yesterday. We think it's a great opportunity to add to WISA's audio IP portfolio for immersive audio. You know, Dolby is pushing their Atmos object-based three-dimensional audio, taking a wireless capability plus Commair's ability to steer the audio to specific locations, depending on using some AI and where consumers are, complements our products and lets us build out the portfolio. We think when you look at it financially, both companies have spent the last three years investing heavily in terms of taking their technology and putting it into an IP-licensable format so that we can have not only licensing revenue and module revenue. We think there's an overlap in market segments like consumer electronics, so that makes sense from a synergy perspective. And when you look at some of the bigger international corporations, Commure may be working with a commercial group We may be working with a consumer group. It gives the sales a combined theme, the ability to have more products to talk to. And if one or the other company is on the approved vendor list, it now lets the other products come onto that approved vendor list. And finally, when we look at why now and the community CommEar brings, bringing Andy Arno, who's chairman of CommEar, onto the WISA board, onto as chairman, we think strengthens the board's governance capabilities and adds some capital market expertise. So, strategically, that's what we see as WISA, but Mike's going to walk through what they see in the immersive audio, and I'm going to turn it over to Mike now to talk about ComEAR and some of their plans. Mike? Yeah, yeah.