WiSA Technologies, Inc.

Yeah, I'd say we start at 8, because you've got to read the Safe Harbor Act anyway.

Yep. Here we go. Greetings, and welcome to the Weiss of Technologies, formerly Summit Wireless Technologies, fourth quarter financial results conference call. At this time, all participants are in a listen-only mode. A brief Q&A session will follow the formal presentation. As a reminder, the conference is being recorded. With us today are Brett Moyer, CEO and President, and CFO, George Oliva. 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 21E 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 the company's business, including financial current macroeconomic uncertainties associated with the COVID-19 pandemic, our inability to predict or measure supply chain disruptions resulting 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, rates of growth, the ability to predict customer demand for existing and future products, and secure adequate manufacturing capacity, consumer demand conditions affecting customers and markets, the ability to hire, retain, and motivate employees, the effects of competition, including price competition, technological, regulatory, and legal developments, developments in the economy and financial markets, and other risks detailed from time to time in the company's filings, with the SEC, including those described in risk factors on our annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC. As revised or updated for any material changes described in any subsequently filed quarterly reports on Form 10-Q. The information in this presentation is as of the date hereof, and the company undertakes no obligations to update unless required to do so by law. With that, I'll turn the call over to Brett. Go ahead, Brett.

Thank you, David. And I'd like to welcome you, ladies and gentlemen, to our fourth quarter call. Hang on. We have operator errors here. OK, so exciting call today. Lots of changes are going on and looking forward to walking through those changes and laying out the 2022 plan. Everybody has recognized WISA, whether you're a consumer in the industry, an investor, as really the highest wireless provider in the world, whether you're measuring channel count, lip sync, latency, speaker sync, et cetera. But we have talked about and alluded to changes in the market that we see as big opportunities. So the market opportunities that are being created now is one, Wi-Fi is getting better. And when we mean better, it doesn't mean it's easier to do 6, 8, 10, 12 channels in Wi-Fi, but they're performing better. So we're at a point where, in fact, we can move our IP from a custom module to Wi-Fi chips. Two, wireless speakers are everywhere, primarily interfacing with the internet with Alexa and Google, but there's the opportunity and some are starting to do it to be multi-role. They can be your internet interface and your music streaming player, or they can act like rear speakers. Third, consumers, we've all seen consumers buy a lot of TVs during the large TVs, or the logical purchase after that is audio to go around those TVs, and the audio codec companies which is Dolby and DTS. There's applying codecs that not only give you two dimensional audio but three dimensional so Dolby Atmos has ceiling sound. front sound, rear sound, side sound. So the consumer has the ability to really create a bubble sound in their room that covers all levels of it. So when you look at where has our first generation gotten, these are all tier one brands. They are the highest brands in the industry in terms of audio quality, but it leaves us a large market below that we haven't been able to address because of the cost structure of our current offering. Now, in addition to these brands, there's other products that we have not talked about because they have not been WISA certified. So we are changing the name to aggregate all our activity. We're going to move to WISA technology. We're going to reinforce the brand. of Wysa for the world and the consumer and the customer that our customers, our speaker brands, our ODMs, which have formerly seen our sales team, our engineering team as Summit Wireless, will now recognize them as Wysa Technologies, which is what they've been doing. They've been inventing Wysa Technologies all along. The consumers, the retailers, the in-channel people We'll still see Weissa Association run as an independent company by Tony Ohlstrom that does the matchmaking at retail, works with the consumer Weissa Wave to bring in consumers, continues to do interoperability testing, because we believe interoperability is important for some segments of the market. Now, One of the benefits of bringing everybody under the Weiss umbrella is we can talk about products that we have not talked with you or other people about. So the industry, by going to the weissassociation.org website in the past, has not seen these products. Now, there's a lot of really cool significant products to our P&L that we have not talked about. For example, if you look at the sofa here, this is the Love Sack sofa. Well, the wireless technology in Stealth Tech is us. That is our first generation product. That is the one that makes the subwoofer rumble and shake the sofa module. If you look at the KEF speakers, that is us as well. That's not a home theater system. That's a high quality audio listening. Soundbars. We've talked about soundbars with Savant because they were certified. But Harmon has a whole line of citation soundbars that use us. Bang & Olufsen has us in every TV. And if you look at this tall guy on the left, this is a $40,000 Lexicon speaker that has our wireless in it. So there's a lot of products that we'll start to be able to represent under the Wysa technology brand that we have not in the past. And this gives a full flavor to the industry for people checking us out in terms of designing with us or not. the depth of our design wins and our partners. So we think that's an immediate benefit. Now, our roadmap today, and we have the current generation, which has been referred to as WISA or Gen 1, that's interoperable. But we have started porting our IP onto the expressive chip and onto the real tech chip, working with real tech. And concurrently with that, we have set up an organization team in India to take that same IP and put it into software so it can be embedded into, for example, a TV or set-top boxes or ultimately cell phones. So while we're launching the modules for speakers and soundbars this year, We are in parallel creating the software to license the IP for transmission directly from smart devices to those audio speakers. And that will include interoperability, which I will cover shortly. Now, how do these new products line up? Wysa, the interoperability brand of Wysa is going to be known as Wysa HT for home theater. It is priced and it has a performance for that audiophile market, high-end TV. So we've been built into the Bang & Olufsen TVs, a select number models at TCL and Skyworth have us actually built in. So that will continue. There's a performance level that All other solutions cannot match. But what we're talking about today is addressing the rest of the market. And the first product that will come out after this will be based on the expressive module. Now, there's a lot of advantage to that. It'll be referred to as WISA-DS. There will not be interoperability with it. That is designed to be specifically for the low end of the market, albeit a high performance from us, for cost-effective low-end soundbars, Bluetooth subs. We think we can compete very aggressively in that market with the expressive module and RIP loaded onto it. Okay. But the purpose of Realtek, and Realtek is the first 5 gigahertz partner, but we're talking with other Wi-Fi vendors, is to port our IP onto their chip. It cuts roughly in half our price, and that's applicable to the broad market, whether it's TVs or set-top boxes or sound bars or home theater or smart speakers. So when you look at this chart and you think about all this technology is finished this year or about to be finished this year, We become the only supplier to the immersive wireless audio market that can go from the bottom of the market to the top of the market that can provide interoperability or no interoperability. So we think there's an extremely strong positioning for the company. We think it's our performance will continue to excel. Now for What does this mean in terms of brands, this positioning? So this is how the audio market has segmented, but these are our customers up above. Pure audiophile, right? So these are speakers that are costing $1,000, $40,000. Enclave and Platinum have reached into the consumer price points. We're defining as below Sonos. We think Sonos is not an audiophile brand. but they are the top of the consumer brand, right? They have broad distribution. They have good audio, not spectacular audio. They got a great firmware, but really the whole prior to these new products rolling out, we were not able to address the consumer market other than through Platinum Audio and offering those solutions. So with these new ones, Now we're able to have conversations with product management and technical engineering teams from all of these brands. And these are the brands that you'll see on a Walmart or a Target, Costco. So one is to think about the devices, but the other is to think about the brands that we can now work with, right? And this dramatically expands it. Moving our IP out of a custom chip to go onto IoT modules does more than open up the brands. It opens up the whole house to opportunities for phone apps, TV apps, to control audio in that space through IoT modules. So this is the market that we start opening up. We're looking forward to it. If you want to look from a TAM perspective, This is a great chart on how we are dramatically expanding our opportunity, both for revenue and customers. So WISA HT, the WISA interoperable logo that you've seen for the last four years is targeted to the home theater speakers, the high end of the sound bars and smart TVs. So you're talking a 50, 60 million unit annual market. WISA DS, right, not interoperable, but that expressive module, that comes in and grabs, and we think is applicable to all the smart TVs and soundbars. So that adds about 250 million unit TAM. But it's really WISA E, our IP ported onto the real tech, and can go out and address all the market segments. all the way up to just below the high-end home theater audio file space. So when you look at the product introductions, the reason we're excited is we have spent years developing this stuff. We have spent last year porting it onto the expressive module, and we'll finish porting it onto the real tech module this year. But that dramatically opens up the market opportunity for us and positions us as the primary leader for immersive wireless audio. Other enhancements that will be coming this year shortly You know, we announced the Wysa SoundSend app, which has won a lot of industry awards, could be downloaded on Android TVs. You will see us announce later this year that it and this will be before the Christmas season, that it can also be downloaded on WebOS TVs, which is your LG system and Tizen TV. operating system, which is Samsung. So between Android, LG, and Samsung, we've covered the bulk of the market for the Android, the WISA app to be downloaded onto TVs. All right. So we have talked about WISA DS on the expressive module being a low price per solution, but this is a really powerful solution. So when you look at our primary competitor, Skyworth, We offer more audio channels. We have a stronger wireless performance as measured by Novus Labs. So it's an independent lab that measured us versus them. And yes, they're in five gigahertz. We're in 2.4 gigahertz and we outperformed, right? And it's a lower cost solution. But from a consumer's perspective, what's really great about this is we can let a sound bar that has a 3.1 architecture in the front of the room. So it is with Dolby Atmos. So it has a left and a right floor and ceiling speakers. We can expand that to a true bubble of immersive sound with a 5.1.4 for less than $15 a wireless technology. Right. So you have front and rear ceiling sounds. You got front and rear floor sounds and you have a subwoofer. We think that's a hot architecture. We think the consumer is going to love it. And we are actively pushing that with customers today. How much can that be worth to us? So we went through and talked about billion unit TAMs, but if you just get right down to the SAM and you think about there's 42 million soundbars this year are projected to be sold, 5% of that market into that architecture with DS would be another 25 million of revenue. So we are highly focused on that one because it covers the beginning, lowest end of the market with a highly sophisticated solution. So if you summarize, where do we fit in the spatial audio ecosystem? You have the content providers sending stuff out. You got the wireless people or the cell phones streaming it into the router. You got Dolby and DTS giving you immersive ceiling and floor sound. The final step, though, is wireless transport. And if you think about WISA, that is what we do. That is our core. We now do it at all levels of the market, not just the highest level. We have the highest performance of each level of the market, but we can address the lowest price, the mid tier and the broad market, as well as the high performance market. And with that, I'd like to turn it over to George to go through our financials.