Q4 2022 WiSA Technologies Inc Earnings Call
Speaker 2: Welcome to the WISEd Technologies fourth quarter and full year 2022 results conference call.
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Speaker 2: I'd like to turn the call over to David Barnard, LHA Investor Relations. Please go ahead.
Speaker 3: Great, thanks Anthony. With us today on the call are Brett Moyer, CEO and President, and CFO , George Alleva. Before turning 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.
Speaker 3: 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 as 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.
Speaker 3: 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, rate of growth, the ability to predict customer demand for existing and future products, and the ability to predict the future.
Speaker 3: and to secure adequate manufacturing capacity, consumer demand conditions affecting consumers and markets, and the ability to hire, retain, and motivate employees the effects of competition, including price competition, technology, regulatory and legal developments, developments in the economy and financial markets, and other risks and uncertainties detailed from time to time in the company's filings with the SEC Commission.
Speaker 3: including those described in risk factors in our annual report on Form 10-K for the year ended December 31, 2022, which will be filed later today, as an update 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 thereof and the company undertakes no obligations to the company.
Speaker 4: today. So we've had
Speaker 4: quite an exciting quarter and year. So you know at the top of the list we're going to talk about Wysa-e. We think it's a compelling technology advancement for the entire consumer electronics industry. We'll explain how Wysa-e.
Speaker 4: fits into the ecosystem, and the TVs, and the audio world.
Speaker 4: Next, WISA-DS, so that's our low-cost
Speaker 4: five channel solution targeted for soundbars. We have brands now starting to issue RFQs to ODMs that are specifying the sales cycles trucking along.
Speaker 4: We are going to go over the Wysa Wave and the marketing focus of the company with Atmos and up firing speakers. This is particularly important since one of the strengths technically that we have is a high channel count for wireless audio. If you really want to go to immersive.
Speaker 4: You need to have more channels of audio and up firing speakers. We'll walk through that today.
Speaker 4: On the side, the consumer electronics industry is still in a slump from overbuilding inventory and weak consumer demand. It certainly impacted us. In response to that, operation expenses will drop by a million plus dollars from Q4 to Q1. The consumer electronics industry is still in a slump from overbuilding inventory to Q4 to Q1.
Speaker 4: But despite the slump and the impact on continuing into the first half of the year, we still expect full year 2023 growth over full year 2022.
Speaker 4: This will be probably the only slide, one of the few slides that some of you have seen before, but for new participants, this lays out what we have been talking about for multiple years as a roadmap. Now the difference is...
Speaker 5: everything here in one form or another was demonstrated in two companies at CES. So we have moved from concept gold desire to the engineering team has finished off or is in the process of finishing off all for a lot of this technology that is on this roadmap. So as a brief history –
Speaker 6: to refresh everybody. Wysate is our original module. Average cost is $10 to $12. It's best in class and targeted for the audio file speaker market. So expensive markets generally more expensive than what I would say a Sonos which is a top of the consumer level market.
Speaker 7: we think the feature set of Wysa-DS and the cost of Wysa-DS will let us penetrate a significant number of the designs over the next 18 months.
Speaker 8: But as I mentioned in the first slide, we've already started penetrating them.
Speaker 9: new at CES but still this was on our roadmap was Wysa-E. So this is the same software in Wysa-DS but enhanced because it's running on a more powerful Wi-Fi chip a 5 gigahertz from Realtek. So again why a 5 gigahertz? It lets us do more channels lets us have higher performance.
Speaker 10: All of this was demonstrated at CES.
Speaker 11: So what did we show? At CES we had 22 companies.
Speaker 12: which is a full schedule for three days. Up here at the top left, not in the picture, is a soundbar on the top right hand picture. That is Wysa HT in the Platten Monaco with up-firing speakers, the little speaker to the right of the soundbar, not the soundbar.
Speaker 13: All right, so that's the first atmos solution we've brought out under the platen brand and again the point is to demonstrate to consumers to the Industry that for a small incremental amount of money you can get that atmos feeling in speakers Not just soundbars, right? The next product just to the left of it
Speaker 14: which is not on the picture, is the soundbar used in Wysa DS.
Speaker 15: Now this had a huge impact at CES. We've been marketing the specs of WysaDS for 9 months, but not until...
Speaker 16: companies and product managers and engineers sat in front of an actual sound bar using YCDS
Speaker 17: With at most speakers in the rear and at most speakers in the sound bar in the front, today grasp what a significant improvement this audio experience is, yet is a cheaper solution.
Speaker 18: Third demo, WysaE. This is the first time we showed WysaE publicly.
Speaker 19: people were simply amazed. We only showed six channels of audio but we ran Top Gun flawlessly in it and when we go to release it we'll be at eight channels headed towards ten channels. And finally brand new
Speaker 20: Nobody was aware that this was going to happen. The bottom picture on the right, that is a simple demo of RIP running with a set-top-box TV SoC, plane 3.1.
Speaker 21: immediately following, the demand was strong enough that we had
Speaker 22: probably half our executive team in Asia going through Korea, Japan and Taiwan so that companies with the most interest
Speaker 23: could share our exciting technology advancements to the rest of their peers in their companies. So we had the soundbar, we took WiSID.
Speaker 24: HT with us and that continues the sales practice going forward.
Speaker 25: So what's the point of DS? Why was it so mesmerizing?
Speaker 26: Well, if you look at this chart, would you see...
Speaker 27: some of you have seen before, the blue color audio is what normally comes out of a soundbar and rear speakers. That's a 5.1 configuration.
Speaker 28: A lot of companies have the purple coming out of a soundbar, which is up-firing.
Speaker 29: At most for the front of the room What delete DS delivers and that's why I blew them away is up firing in the rear as Well, but not just up firing. It's at a lower price point
Speaker 30: and the same simple implementation off of one module. So if you have rear speakers, you can have at most rear speakers for free essentially, if you discount the drivers. So that's what blew them away. This bubble of blue and purple is what truly gives you immersive audio. And that's what we demonstrated.
Speaker 31: that's what will be built into the Rio sound bar that Platinum Audio will release in Q3. From a price feature viewpoint,
Speaker 32: Here is a relatively simple comparison from an audio perspective. You can make a comparison chart 20 rows long. If you just look at the fundamental audio experience and you look at the price point of a Sonos ARC at $899.
You know Sonos Arc at $899 does not include rear speakers, does not include a sub, does not include rear up-firing speakers, it does include front up-firing speakers built into the soundbar.
When Platten Audio launches using Wysa DS, it'll be $899, but it'll deliver rear speakers, it'll deliver a subwoofer, it'll deliver rear up-firing speakers, and it'll have the front up-firing speakers in the soundbar.
used in WISA-DS, it'll be $899, but it'll deliver rear speakers, it'll deliver a subwoofer, it'll deliver rear up-firing speakers, and it'll have the front up-firing speakers in the soundbar.
a limited quantities both to prove to the audio companies this is a great solution, and to prove to consumers why I said DS is a great solution and deliver a great audio.
Now why is the E is...
truly we believe ultimately the biggest opportunity here. So as I mentioned, we demonstrated it. And that's because you see other industry executives currently talking about trying to eliminate the HDMI cable from the TV to the soundbar.
Well that's nice, nothing like saving $10 for the consumers. But what YCE is about and what we are starting to drive with the press release this morning is changing the industry conversation. Why would you stop there? With YCE built into an Atmos enabled TV, we are going to be talking about the
You save the consumer hundreds of dollars at retail pricing.
and deliver better experience. The sound bar of the TV duplicate a tremendous amount of electronics and hardware.
which is expensive. So if you think about it, there may be a small Wi-Fi chip added to a TV, but you eliminate the module around the Wi-Fi chip.
You eliminate Adobe Atmos royalty that's being paid.
in the soundbar. You eliminate the soundbars SOC which is the operating chip. You eliminate all HDMI connectors. You eliminate the input output expenses around other devices in the soundbar. You eliminate the HDMI cable which the industry is trying to do, and duplicate streaming services. Now there's more things that get reduced.
Fundamentally, our argument is with Y say E
you can move the soundbar into a speaker, whether it's a long tube with a set of speakers in it.
or whether it is discrete speakers, we don't care. But the channel count is there to eliminate the duplicated cost between a sound bar and TV, and bring truly immersive audio into the home. That's just as simple a setup as it was in a sound bar.
All right, update on the WISA wave and the marketing strategy. So in 2022, we had more than a million visitors come into our websites, more than 2 million pages.
Every one of those visitors was responding to an organic search, a product review, a customer spec sheet that brought them in or our ads. If we ran ads, we pivoted the messaging mid-year in 2022.
away from bringing people just to the WISAS site.
and bringing them to the Platten site, but bringing them with an ad that said WISA certified, or Platten Audio Model XYZ certified by WISA. The impact was we shortened the cycle for the consumer to make a buying decision and strengthen the branding results.
for WISA certified and we'll continue to work that. We had quite a
quite a good response on growth of pure, in-group organic searches coming into WISAM.
In addition that will occur in 2023 is linking WISA, WISA certification to Dolby Atmos or DTSS you
So one of our key strengths is we have the knowledge to implement more channels of audio than anybody.
And that's a key feature of getting the most out of Dolby Atmos or DPSX.
So when we go out and work product reviews, the industry press, this CE Pro headline that just came out in the last week or so is exactly what we're going to be pushing and what we're striving for.
And to quote, Latin's updated Monaco 5.1.2 home theater system adds Dolby Atmos to its Wysa powered offering to create an affordable yet immersive home cinema experience. Now that's not our quote, that's the CE Pro headline. And that's what you will see over and over again this year as we focus on...
the Monaco with up-firing speakers and we focus in the fall on the at most launch with Rio 5.1.4 soundbar using the Wysa DX.
Now from the state of the industry to touch on my earlier comments, there is a glut of inventory. You can see heavy discounting on TV particularly, the most visible.
From the state of the industry, to touch on my earlier comments, there is a glut of inventory. You can see heavy discounting on TV particularly, the most visible.
Now, so impact to us is we have seen pushback on customers and we've seen some cancellations.
This will continue in the first half, but we do think we are getting initial indications that it should be cleaned up by the time we get to mid-year.
Despite the industry's perspective, we believe we have full year growth year over year because we have new Wysa HT designs going into production. Two in Japan and one in Korea. We have obviously completely new Wysa DS designs going into production.
And we've got Platon Audio's Rio 5.1.4 sound bar being launched in Q3.
So you take those three new product category launches, add inventory and balance, and we think we end the year with growth despite the first half.
Now I'll turn the slide over to George. Thank you, Brett. I think it's taking quite a while for the slides to...
to flip over. On the financials for the full year of 2022, revenues were $3.4 million, down about 49% from $6.5 million in 2021.
Gross margin was 11.7% compared to 28.5% in 2021. That's primarily due to decreased volumes.
fixed costs spread over less units.
The operating expenses were $18.4 million including $2.2 million of non-cash expenses compared to $13.4 million including $1.5 million of non-cash expenses and depreciation in 2021. That's primarily stock comp expense and depreciation. The revenue for the fourth quarter was $900,000.
2 million registered direct offering that closed in February .
In terms of guidance, we're projecting, as Brett said, a growth year over year from 22 to 23, but it's mostly in the second half. It should be down early in Q1 and it will recover towards the second half of the year.
In terms of guidance, we're projecting, as Brett said, a growth year over year from 22 to 23, but it's mostly in the second half. We should be down early in Q1 and it will recover towards the second half of the year. With that, I'll turn it back over to Brett.
Thank you, George. So if we come back to review what is in the company's portfolio, we've got the best technology in the industry.
We've got a full product line that can reach a large market both in the soundbar and the TV markets.
We have an interoperability standard with WISA that great partners and that partner list who's implemented will expand it. The IP is strong, we continue to add.
patents around it and we had a down year with the industry. We expect to see growth return this year.
patents around it and we had a down year with the industry. We expect to see growth return this year. And with that operator we'll open the...
open the lineup for questions.
open the lineup for questions. We will now begin the question and answers section.
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At this time, we will pause momentarily to assemble our roster. Our first question is for Dr.
will come from Jack VanderArd with Maxon Group. You may now go ahead. Okay, great. Good morning, guys. I appreciate the quarterly update. I'll start the question for Brett.
You know, Brett, it's obviously been a challenging environment for the entire consumer electronics industry as a whole. But it sounds like your new products, the Wysa E, Wysa DS, are progressing along pretty well.
You still expect to drive full year revenue growth in 2023 despite that slower maybe first half of the year.
So is this just curious? Can you help us understand the drivers I? guess more split between Why is the e what's the ds and then your your wife to ht? Modules and is it is it back half loaded from the new product specifically? Or do you also expect your your legacy technology to also?
ramp as well in the back half. Thanks.
Well, so if I understand the question properly, we do have new designs on our WISA HT, aka the legacy modules, right? That are going into production and they go into production in the second half, number one.
All DS designs will go into production. I mean, there's a small one out there, but any material ones will start going into production in Q3 and Q4, right? OISA-E is not on the list of drivers for revenue this year. I do believe we'll have some revenue late in the year, but it is not the main driver of revenue rebounding.
So it's HT, it's DS. And then we, based on the response on the Soundbar 5.1.4 solution, we think that's a strong retail product. We are not going to buy a lot of them, but that will be a good cue for consumer product drive and revenue.
Okay, great. I appreciate the clarity there. YCDS, YCHT, and some of these other products, but YC is the biggest driver, at least in your mind, of longer-term revenue, it sounds like. It's not factored into your 2023 expectation.
I think WISA-DS in 2024 is really strong. I think WISA-E, it's just all around design cycles. So we are showing WISA-E at CES. The sales activity is high, but it will take customers a while to make design decisions and then build stuff in. So WISA-E starts generating revenue in 2024 for sure. It has a big leap in 2025. So it's kind of like DS, but just 12 months before. 12 months lag, right? DS is going to start delivering revenue this year.
It'll have a big leap next year. WICE will start delivering revenue next year. WICE and they'll have a big leap the following year.
Understood. And then, if I look at just from your success at CES, it sounds like you had 22 companies that you mentioned engaging in those demos. I also got to check out your product at CES as well.
I was impressed by it. That was great. I'm just wondering, of the 22 companies or demos, do you expect more inbound requests? Are you getting more inbound requests from more demos from others? Is that not the right way to think about it? I'm just wondering, are you able to convert these 22 demos into customers?
Are you able to, do you expect any revenue to come from them, I guess, down the road? Absolutely. Absolutely, Jack. How many do we think will convert?
to expect any revenue to come from them, I guess, down the road? Absolutely. Absolutely, Jack. How many do we think will convert? I think
I would expect half to convert over the next 12 months into one solution or the other.
Is there any overlap with these 22 demo customers that...
Are any of them existing Wysa HT customers or any brands? I wonder if there's overlap. Absolutely. I must mention we was not seen in the SCARS update the state
there's overlap with our existing HT people but
The majority of them, they may be the same company, but as we've talked about for, you know, called 18 months now, the new price points lets us go to new designs.
So where we may be in a high-end architecture price point system and you know Harman had us in the citation line.
Well, at half price or 70% less, we can now talk to other product managers about other solutions.
So that's true for a lot of companies, right?
Well, that would be great. Fantastic. I will hop back into the queue. Thanks for taking my questions.
Yep.
Our next question will come from Kevin Deedy with HC Wainwright. You may now go ahead.
Thanks. Good morning, Brett. George, thanks for having me. Thanks, Kevin.
so morning good morning good morning
Good morning. Good morning. Good morning. Okay. Can we look at
at industry inventory levels for a bit, Brett.
Maybe you can just give us a little more assurances on how you see
the CE market sort of bouncing back. I think it's made a great case for new product introduction.
But I think the elephant in the room is whether or not you think consumers are going to snap.
And I think a lot of that at New Stuff, a lot of that's predicated on what's available now.
I think a lot of that at new stuff a lot of that's predicated on what's available now Maybe you could just walk us through your screen there.
Yes, so we can talk about the industry or we can talk about the risk to wireless performance, right? So from our perspective, the bounce back
is less significant than the Rio launch, is less significant than the new product launch from a technology perspective, in terms of driving full year growth.
is less significant than the Rio launch, is less significant than the new product launch, is from a technology perspective, in terms of driving full year growth. But from an industry perspective,
We still see POs move from quarter one to quarter two, quarter two to quarter three, I mean current quarter to next quarter, not saying Q1, Q2, right?
But from our perspective, the industry has known that they had excess inventory and overbuilt and undersold.
Clearly, clearly, since Q2 last year, the new inventory was out of balance and they missed 2021's Christmas, but all signs indicate would have told any CE brand that, you know.
Q3 was terrible, Q4 was terrible, etc. Right? You saw a lot of discounts in October , November . So, from my perspective, when I say I think it comes back in line...
I'm forecasting that
12 months is sufficient to
address inventory imbalances where there's cutting price or cutting production or all of the above right
So that's our basis for saying the industry should get aligned to the new demand levels by mid-year.
Okay, that's helpful.
I like the way you prefaced your answer though, Brett, looking at it from a risk profile because I think...
That begs the question on the sourcing side. Given pandemic.
issues on component
availability. Maybe you could talk to your comfort level and seeing the product you need to meet demand you're hoping for.
Mu
I believe.
for us supplying to our customers modules there are no issues we have not gotten any issues on the Rio 5.1.4 build
for Q3.
Three.
the feedback we are getting from our module customers.
is less around part shortages and more around just don't need more product right now.
Striking times have shrunk.
Could there be an IC that...
comes up short for somebody, maybe, but that's not the message primarily that we're getting. Primarily we're getting the message of we don't need product right now.
Okay, so little, I guess, little risk on your supply and your manufacturing, your ability to deliver, but greater risk on...
anticipation for end customer demand in the second half.
anticipation for end customer demand in the second half. Is that a fair assessment?
That's a fair assessment for the HT products, right? Okay, so you have much more confidence in...
addressing a larger market sort of in the mid-tier range or even lower tier.
a larger market sort of in the mid-tier range or even lower tier for home theaters?
Yeah, so look, we're addressing a larger market with no question about that strategy for D, S and E. But from a 2023 PNL perspective, if a product is going to design this year and into production, that means people were designing it last year.
and or you know this quarter or next quarter right?
They are not going to design in a part they don't after the year the industry had the year before. They are not going to design a part my assumptions they are not designing a part they can't get into these products.
Okay. That
Okay, on the Rio, clearly you're confident there.
On the Rio, clearly you're confident there on the production side.
You'll be, what, available at retail and on the web for the holiday selling season.
Absolutely. That's the objective?
That's the objective? Yeah.
We expect to be at retail in September . I think we are going to get an incredible amount of product reviews on that product.
Some people heard it at CES. People that had said no to the solution over and over during the prior 12 months, but had never heard it, right, said no to the spec sheet?
that I had you know the quote one VP of engineering said I have to have it it's like well no <expletive> we've been telling you that for nine months
But that type of blowaway experience will propagate through the trade press and the consumers pretty quickly.
But that type of blowaway experience will propagate through the trade press and the consumers pretty quickly.
Yeah, no, I'm with you on that.
I thought you guys demoed well. Okay, quick, couple quick questions for George. 2.9 million in cash post-deal year end. Where do you think you are now, sort of pro forma, post the six, whatever, 6.2 raise in Feb? We're a little north of 4 million in cash right now.
We have quite a bit of finished goods inventory, so we hope to liquidate some of that in the second half of the year. We'll probably be needing to raise a little money in mid-year.
Okay, no, the piece that's missing. Hold on Kevin. I'm sorry. Keep watch!
Yeah, the piece that's missing in this conversation, if you're trying to triangulate cash, etc., is we did pay down a significant part of the LEND debt.
Well, that's where I was going. Because I didn't see a balance sheet in today's press.
It's coming up. What was a $3.3 million note, or $3.6 million I think it was, is down to $1.3 million. Okay, so that's about now, Brett, or is that a year in?
what what was a three point three million dollar note or three six I think it was is down to one point three okay so that's that's about now bread or is that was that a year in now now
Okay. Do you have a...
A revolver you can tap? No, we don't really have a revolver.
An ATM? You're talking? Nope, nope, I'm looking for something on the debt side.
I was just wondering what you have like you took your you paid off what 2.3 million to your your debt do you have the flexibility to go back to that if you need it
I would assume so, but it's not a structured revolver.
I would assume so but it's not a structured revolver. Okay.
That fund has been a very supportive fund of the vision and the business plan.
than the execution. Okay. Admits the brutal pandemic and product shortages and...
hell on earth that you've faced for the past three years.
So, give us the sort of the share count.
Where is that?
It's currently approaching 2 million.
Okay.
Okay, okay
Alright, so roughly north of 4 mil in cash, pro forma, 1.3 in debt, and 2 million shares out. Okay. George, when do you think you'll follow your K?
It should be after closed market today.
Okay, thank you. Thank you gentlemen. Thanks for entertaining. Appreciate it. Thanks for the call.
Our next question will come from Ed Wu with Ascendian Capital. You may now go ahead. Thank you for taking my question. As there is a glut in the channel in terms of inventory, have you seen reductions in input component costs as well as lead times?
I have not seen a reduction in components of ACOSS, no.
Yeah, I mean we have a pretty narrow set, Ed, right?
I mean, the components we buy are just around our wireless modules.
we don't see the pricing action across all the components of products we go into.
All right, thanks for answering that question.
I think most of the increase in cost is related to freight costs. I think freight costs increased during the pandemic and hasn't come down yet.
Okay, then you guys mentioned that you guys are going to be reducing operating costs. Will you have to increase it as product revenue increases in the back up this year?
You know, the largest part of our operating costs is R&D and test.
You know, the largest part of our operating costs is R&D and test.
So the more flexible pieces of marketing, so there will be a bump.
in the marketing at Christmas, but there'll be a corresponding bump in revenue.
Great. Well, thanks first for answering my question and I hope you guys good luck. Thank you.
Thanks Ed. Thank you. Our next question will come from Jim McCury with Dose & James. Hi, I'm James.
You may now go ahead. Thank you and good morning. Following up on...
Yeah, thanks. Following up on the prior question about OP-X.
Thanks. Following up on the prior question about OPACs.
You lower OPEX and Q1, and that's the new base. So it's not further reductions from there. But that's the new baseline that you'll use for the company and grow into the expenses from there. Is that right?
You know, at the largest part, that's right, but there's still a series of expense control items that we're working through.
You know at the largest part that's right, but there's still a series of expense control items that we're working through through.
You know, we're not looking at the engineering resources, but from a G&A and court development we still have some savings to achieve.
Okay, that's helpful. Thank you. I mean, just ballpark. It kind of sounds like.
revenue in the first half is maybe 30 to 35 percent of the total.
revenues you're expecting for the year? Do I have that kind of right?
Well, that's interesting.
Well that's interesting.
Of all the numbers I've looked at you. All right, let me think about that. Yeah, what was your percentage? Third? Yeah, it's just I'm just trying to get a feel for how big of a ramp you're expecting in the second half. That's all.
I don't think that's on but I could refine it after the call. Okay great and then lastly
Also, on a prior question, you were asked about, or maybe in response to a prior question, you talked about finished goods inventory.
Is there a risk of
Inventory write downs, I mean, how do you feel about the valuation of that inventory if there's any?
technological ops lessons or price ops or price declines that you need to account for. I'm just trying to get a better understanding about the value of the inventory.
Well, George can address it from an accounting viewpoint, but from a technology out the lessons.
You know some of these some of these HD designs that have gone on in the productions they have a three or four year of life.
Right, I mean the pro audio doesn't read as a speakers every year. They do that every four years or five years or three years, right? So we don't see a risk of obsolescence from a customer demand.
and the speaker inventory is just selling it.
So, I don't, we haven't taken any write downs. I don't think there's a big risk currently. Okay, that's it for me. Thanks a lot.
All right, thanks Jim.
Again, if you have a question, please press star then 1.
Our next question will come from Jared Marrons with retail. You may now go ahead. You may now go ahead and close the poll.
This question will come from Jared Merrins with retail. You may now go ahead. Hello guys, good morning. Thank you for taking my call.
Good morning, Jared. Good. How you guys doing? I've been a wise investor for a little over a year and a half now and...
Over that year and a half you started off the conference call saying it's been exciting for Wiza Well as a retail investor has not been very exciting my Investment in this company is now basically worthless and the company just continues to dilute basically reverse split and then dilute You've made a statement that your revenue this year is going to be
Yes, so there were clear industry impacts, Jared. Well, first of all, let me just say
With you, you know, the board, management, all the WISEd employees, we've suffered the same pain on the stock. It's been painful, right? So no question about that across the entire company from the directors down to every employee, right? Yeah.
But from a perspective I tried to lay that out into one slide we have new products going in place Which will build revenue this year and let and when you look at last year We had a terrible q3 and q4 we had a strong 2021 we saw we had a decent lol
But as we talked about the consumer and it's not specific to just us or our products, but the consumer in May and June really moved away from
outfitting the house or the COVID nest or the COVID cave as I call it. So you can see this happening in the TV industry the stationary exercise equipment. Consumer really shifted spending.
to retail travel to going out again as a COVID lockdown started to expire. I think we, and that's what happened in the second half, I think we have a different solution, a different issue that the country is struggling with now, the cost of living.
But that seems to be coming under control somewhat. But primarily the COVID cave people stopped outfitting it. And so we didn't have a strong Q3, Q4 clearly.
And you also stated that you had a $1.1 million, you're going to have a reduction in costs. What makes up that $1.1 million?
We have trimmed heads. We are trimming marketing expenses. We plan to trim some legal expenses.
We have trimmed heads, we are trimming marketing expenses, we plan to trim some legal expenses.
We don't plan to trim engineering. So do you have plans to trim further into the next quarters or is it just this one quarter that you're looking to just trim?
Well, we're always looking at what expenses are worth investing in, because look, it's an investment, right? And what doesn't need investing in?
Well we're always looking at what expenses are worth investing in because look it's an investment right and what doesn't need investing in.
We realign Q1, we'll continue to look at expenses in Q2, and try to optimize our operations.
So based on what you guys have said also, you made a statement that your cash burn still is pretty high. So you're going to have to basically do another dilution again. Is that correct? Yes sir.
Well, George mentioned that, but how that dilution were to occur, as you and everybody else knows, we have...
engage with AQT to work on strategic partnering. So we're not saying that we will be doing just a straight out financing.
So that's still not 100% but it probably like 80 to 90% you're probably going to end up having to dilute again correct.
Jared, we've given the guidance that we've given, right? So you can build your models.
But we are working to do a strategic partnership and that's plan A. Okay. Let's talk about the partnership. You guys came out with a press release that you had potentially for
partners potential partners that would partner with WISA what came about that and why is there been any update on that? Well there will be no updates until there's a definitive agreement with a partner here that's just the way the process works
We're engaged and we have ongoing conversations. There's a back and forth and around and around that occurs every week. But we can't update on hypotheticals. We can't update on hypotheticals.
So what you're saying is that process is still ongoing. It's not ended. No, it has not. Okay. We—
We believe that product roadmap we showed at CES is...
a very compelling technical achievement.
by the best Wi-Fi audio team in the industry. We believe that it positions us to go into substantially larger markets. And as I've said last year, that was our goal. That's what we achieved. That's what we are doing. And Brett, I believe in all the products you make. That's the reason why I invested in you.
one of these times you have to look at and say, what are we are we going in the right direction? I think you are but I don't like the continued dilution that you keep doing. We're basically you're using shareholders to basically finance that company.
When revenue has got to kick in, is there a deal with that? I don't disagree, Jared, that revenue has got to kick in. We've addressed that there's, we expect to get revenue growth off of three new sets of products coming out.
This year, we had revenue growth of 180% in 2021.
Last year was a bad year across the consumer electronics industry. It was a bad year for shareholders across many, many companies. It was a bad year for the employees.
who have worked really hard to get to this great presentation of Functioning Technology at CES.
But when I say that I appreciate everything everybody's done. What I'm trying to say is the results, like I said, I've invested in this company and it's basically worthless now. It's worth nothing to me.
So I'm really concerned that I put that my hard-earned money into this and it's basically not worth anything anymore And I still see the direction of you guys using dilution and dilution and dilution When I'm a shareholder and you guys should be trying to protect the share price and you're not doing that
I guess my last question to you is, please explain to me, and I want you to explain to all the retail investors out there, why did you do a reverse split when you had the opportunity to get an extension for 180 days and didn't even look at that avenue?
Well, let's correct your statement, right? You do not know what we looked at or did not look at, right?
So, we're pretty thorough in what we look at and that was the assessment of the board and that's what we did.
So we're pretty thorough in what we look at and that was the assessment of the board and that's what we did. We were at 10 cents Jared.
What do you mean 10 cents? Minimum bid on NASDAQ is a dollar. Right. Right. So we had to address it. It's that simple. We did not want to risk getting delisted. So we did address it. There is an option to go 180 days on an extension.
And you may have looked at that, but what I'm saying is it wasn't conveyed to you in anything saying that you tried or I mean It seemed like you automatically did a reverse split as soon as you got the okay to do it. You did it basically overnight
So I just want to know the reaction behind that because right now if you look at the stock price today, our stock price is at $3.30, something like that. You're going to look at that stock price in the next quarter and I guarantee you're going to be below $1 again.
And you're going to have to basically come up with the same thing as you did before.
So you're just basically doing the same thing over and over again and that's just insanity and I want to understand why you continuously do the same things and not look at other avenues because I think this reverse split hurts everybody other than certain people that you're involved with but it hurts people that have hard earned money invested in your company. I mean this stock is worth...
reasons we hired AQT.
Is it better to merge partner sell versus finance? So we work that equation every month of the year since August last year. And we'll continue to work that equation.
and how that plays out this year, we cannot discuss until it plays out. Okay? So with that operator, I think we'll terminate the call, and I'd like to thank everybody for coming.