WiSA Technologies, Inc.

Greetings and welcome to the Summit Wireless Technologies first quarter 2021 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Kirsten Chapman of LAS. LHA Investor Relations. Thank you. You may begin.

Thanks, Daryl. Good morning, everyone. I'd like to welcome you to the Summit Wireless Technologies first quarter 2021 financial results call. With us today are Summit Wireless CEO and President Brett Moyer and CFO George Oliva. Before I turn the call to Brett, I'd like to remind everyone of the safe harbor statement referenced in the SEC filings. The Private Securities Litigation Act of 1995 provides a safe harbor for forward-looking statements, including statements made during the course of today's call. Statements contained herein that are not based on current or historical facts are forward-looking in nature and constitute forward-looking statements within the meeting of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the company's expectations about its future operating results, performance, and opportunities. These forward-looking statements are based on information currently available to the company Current macroeconomic uncertainties associated with COVID-19. Our ability to predict the timing and design winds during production and the potential future revenue associated with our design winds. Our rate of growth. Our ability to predict customer demand for our existing and future products and to secure adequate manufacturing capacity. consumer demand conditions affecting our customers and markets, our ability to hire and maintain and motivate employees, our suppliers' ability to provide supplies, the effect of competition including price competition, technological and regulatory and legal developments, and developments in the economy and financial markets and others that could cause the company's actual results and performance prospects and opportunities to differ materially from those expressed in or implied by the forward-looking statements. For a more detailed discussion of some of the ongoing risks and uncertainties of the business, I'll refer you to the company's various SEC filings. It's now my pleasure to turn the call over to Summit CEO, Brett Moyer. Please go ahead, Brett.

Thank you, Kirsten, and welcome, ladies and gentlemen, to the Summit Q1 Investor Update. This is an exciting quarter. We're reporting out record revenue and significant improvement in the gross margin performance of the company and ending with a strong cash position. We will go through today some of the key growth drivers that we outlined in the Q1 call. So for new investors or investors still doing due diligence, I'd refer you to the March 12th year-end call where we laid out the key milestones and the strategic plan. as part of your education on WISA. Now, WISA Summit with the WISA stock symbol is two organizations. Summit does own the WISA organization. And in the Summit side of the organization, we develop chips, modules, IP for wireless multichannel. And we have a standard organization with over 70 brands participating in it so that we can each transmitter or each TV or each speaker knows the standard to communicate with the other products. So that's the quick overview. We're not going to go through all 70 brands, but we are going to talk about the brands that are shipping this year. So starting in the last call. We did outline this slide. There's some new brands, and I'd like to highlight that we added a sixth TV. So as investors, you can expect us to, just like we announced Hisense since the last call, you can expect us to announce a fifth and a sixth TV brand working with WISA between now and the holiday seasons. In terms of overall brand shipping products, for those that were around at the IPO two and a half years ago, there were six. Now you can see there's, we say 25 plus. There's more than 30 brands on this page. And as products hit the market and are available, the consumer will increase our brand count of companies using some of this technology. Three main growth drivers for 2021 and 2022, just as a reminder, is SoundSend, which is a small transmitter that will plug into any HDMI connected TV with ARC or eARC and connect to all WISA certified speakers. Second initiative is the WISA Wave. The objective is to educate a million consumers on the category. And we're going to give you an update on that and SoundSend this quarter. And the third is our next generation Wi-Fi technology, which we are not updating today since we just did it on March 12th. All right. Happy to announce that LG has extended their Wi-Fi Ready TV line into the 2021 line. They also, as we previously announced, extended it to their projectors. And the next WISA-ready brand is Hisense. They announced their products earlier this week on May 5th. So you can now go out and do research. We've already started seeing some reviews come up on them. And that review in particular included a mention about WISA, which is important. All right. On the speaker side, these slides are the coolest slides. If you look at Bang & Olufsen, we just announced that one. Very high price, wicked cool, rotating form factor around it, and that is now available. The other really innovative design is from the Harman Radiance. This is not available in the U.S., but it is available internationally. It's a 2.1 system, and those tall, thin columns are actually highly sophisticated speakers using some proprietary audio IP of Harman's. And then extending, the first company to extend into the Dolby Atmos is Light. So they have ceiling speakers. That'll let any of our speaker partners that are working with custom installers connect to real speakers in the ceiling, so not simulated Dolby, not sounds coming out of the top of a sound bar, going up to the ceiling and then bouncing back down. This will be actually calibrated to the speakers installed in the ceiling, give you a great Dolby Atmos sound. And finally, Onkyo, we announced this morning, has launched the Onkyo Sound Spear. Is it a typo in here? And you will see that, well, they're aggressively marketing already in Japan, and they'll move it to international distribution. That's the eye candy for this presentation. Update on SoundSend. We've now picked up four awards. The most recent one is the Stevie Award. There's another one out there that we're competing for, but this just shows you the strong recognition The consumer electronics industry has given the SoundSend already as a brand new product. We'll be pushing more features and software updates in a new software release for SoundSend in May. This will probably happen every twice a year or so, just like TVs get it. And then starting this quarter, you'll see SoundSend distributed internationally. First two countries will be the UK and Japan. Okay, WISA Wave, I will still say this is probably the biggest catalyst for this year, right? So if you think about the WISA Association, its mission is to help. The mission beyond just making sure there's technical spec is to make sure consumers start getting educated on WISA and the benefits and the simplicity of setting up a system, making sure that the retailers see WISA products as a category, as they see HDMI products as a category, as they see Bluetooth as a category. And I think as we build this out, we'll be able to lower our brand's marketing costs by using the analytics from the website. So we have been reporting out traffic growth. We saw that start to increase with LG's launch back in 2019. had guided to 135,000 in Q1. There's some seasonality to the consumer shopping pattern, so clearly it came down from 185 in Q4, but Q1 this year to Q1 last year is more than 300% growth in visitors to the various WISO websites. Still on track and still projecting that we will reach a million visitors this year.