Q1 2024 WiSA Technologies Inc Earnings Call
Good day and welcome to the Wayside Technology's first quarter 2024 results conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero.
Operator: Good day, and welcome to the WiSA Technologies first quarter 2024 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists 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 1 on your touchtone phone. And to withdraw your question, please press star then 2. This event is being recorded. I would now like to turn the conference over to Mr. David Barnard. Please go ahead, sir.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone.
Withdraw your question. Please press Star then two.
Speaker Change: Event is being recorded I would now like to turn the conference over to Mr. David Benoit. Please go ahead Sir.
David Barnard: Greetings and welcome to WiSA Technologies' conference call to review its first quarter 2024 results and provide a business update. At this time, all participants are in list-only mode.
Speaker Change: Greetings and welcome to ice to technologies conference call to review its first quarter 2024 results and provide a business update.
Speaker Change: At this time all participants are in a listen only mode. A brief Q&A again will follow the formal presentation. As a reminder, the conference is being recorded with US today is Brett Moyer CEO and president before turning the call over to Brett I'd like to remind everyone that today's conference call will include forward looking statements, which are subject to various risks and uncertainties that could cause.
David Barnard: A brief Q&A. Again, we'll follow the formal presentation. As a reminder, the conference is being recorded. With us today is Brett Moyer, CEO, and President. Before turning the call over to Brett, I'd like to remind everyone that today's conference call will include forward-looking statements, which are subject to various risks and uncertainties that could cause their actual results to differ materially from these statements. Any such forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and risk factors discussed in our filings with the SEC. WiSA assumes no obligation to update any of these forward-looking statements except as required by law.
Speaker Change: Our actual results to differ materially from these statements any such forward looking statements should be considered in conjunction with the cautionary statements in our earnings release and risk factors discussed in our filings with the SEC why isn't it assumes no obligation to update any of these forward looking statements, except as required by law with that I'll turn the call over to Brett. Please go.
David Barnard: With that, I'll turn the call over to Brett. Please go ahead. Thank you, David.
Brett A. Moyer: [noise] ahead.
Brett A. Moyer: Thank you David and good morning, ladies and gentlemen, thank you for joining us on voice of technologies, a Q1 investor update.
Brett A. Moyer: Thank you, David. And good morning, ladies and gentlemen.
Brett A. Moyer: Thank you for joining us for WiSA Technologies' Q1 Investor Update. Now, today, we'll go over a quick overview of WiSA for any new investors or listeners. We'll cover WiSA E's competitive advantage and how we designed it, and we'll go into the market. We'll discuss licensing deals and financial highlights. And finally, we'll talk a little bit about the shareholder vote on May 31st designed to encourage everybody to get out and vote. For the highlights,
Brett A. Moyer: Today, we'll go over a quick overview of why so for any new investors or listeners will cover Weiss of ease competitive advantage in how we architect it and we're going to market well discuss licensing deals.
Brett A. Moyer: Financial highlights and finally, we'll talk a little bit about the shareholder vote on may 31st.
Brett A. Moyer: To encourage everybody to go out and vote.
Brett A. Moyer: Well the highlights when we launched <unk> late last year and started the licensing it in Q4.
Brett A. Moyer: When we launched WiSA-E late last year and started licensing it in Q4, we think that's a major inflection point for the company that'll start demonstrating itself in revenue in the second half of this year and for the industry, because, as we'll talk about later in this presentation, it's a very powerful platform, this software that we developed for transmission. And in October, we announced we would start licensing it to TV and set-top box companies for the transmission piece of it, right, not the receiver and the speaker. And to date, in the first six months, we've signed five licenses, which we think is a terrific start for a new technology.
Brett A. Moyer: We think that's a major inflection point for the company that'll start.
Brett A. Moyer: Demonstrating itself.
Brett A. Moyer: Revenues in the second half of this year and for the industry.
Speaker Change: I guess I just will talk about later in this presentation is a very powerful platform. The software that we developed for transmission.
And in October we announced we were start licensing it to TV set top box companies or the transmission piece of it right not the piece and the speaker.
Speaker Change: And to date the first six months, we've signed five licenses, which we think is a terrific start to our new technology.
Brett A. Moyer: We continue to have a strong portfolio of patents in the wireless space for multi-channel, high-resolution audio. And uniquely to us, we have the WiSA Association, referred to as WiSA LLC, which is designed to make sure there's interoperability between products that have the source of content with a WiSA-E transmitter and have a WiSA-E receiver. And that organization works with both sides of the fence for interoperability testing, works with retailers to make sure they understand what WiSA-E does, and makes sure the branding is properly displayed so that consumers know which products work with which.
Speaker Change: We continue to have a strong portfolio.
Speaker Change: Portfolio of patents in the wireless space.
Speaker Change: For multichannel high resolution audio.
Speaker Change: And uniquely to US we have the whites association referred to his wife's LLC, which is designed to make sure there's interoperability between Prada.
Speaker Change: Products that have the source of content, where the YC E transmitter.
Speaker Change: And I have a wife the receiver and that organization works with both sides of the fence for interoperability testing works with retailers and make sure. They understand what why is that he does.
Speaker Change: Make sure the brand name is properly display so that.
Speaker Change: Sumer snow, which products work with which this is modeled after.
Brett A. Moyer: This is modeled after how HDMI started and went to market, and we're continuing to build that out. And finally, fortunately for us, while this is a powerful, innovative new technology, WiSA-E, we have the great advantage of launching it into a premier customer base, and we'll go through a few of those today, but we've been selling the highest performance wireless multi-channel audio for 11 years, and that customer base is very supportive of us, albeit they understand that we had a very expensive solution that we've now addressed.
Speaker Change: How HDMI started and went to market and we're continuing to build that out.
Speaker Change: And finally, Fortunately for US well this is a powerful and innovative new technology wise I E. We have the great advantage of launching it into a premier customer base and we will go through a few of those today, but we've been selling the highest performance wireless multichannel audio.
Speaker Change: For 11 years and that customer base is very supportive of us, albeit they understand that we had a very expensive solution that we've now addressed.
Speaker Change: Alright, so what's immersive audio spatial audio.
Brett A. Moyer: All right, so what's immersive audio, spatial audio? You think about the innovation that's going on in video recording and mixing and the audio industry. We're all trying to create that environment, whether it's a bedroom, a family room, a patio, a garage, but create that environment so that the audio sounds like you would experience it if you were there, in the concert, in the symphony, at the NFL game, in the movie theater, right? That's what spatial audio or immersive audio is trying to do, create that three-dimensional audio for the consumer. And this picture in the shaded green is demonstrating what they're trying to get to.
Brett A. Moyer: So Dolby has Atmos, which is their immersive technology. Google has IAMF, which is their solution. And Xperia has DTSX. All of them are trying to make it easy for you to understand and hear all the audio that occurs when you're at that event or at that movie theater or in the NFL stadium, right? Above you, behind you, on the side, when you go wireless and not make those speakers wired, then it becomes easy for the consumer to set up and enjoy that immersive audio. And that's where we come in.
Do you think about what the the innovation, that's going on and video recording and mixing in and the audio industry.
Speaker Change: We're all trying to create that environment, whether it's a bedroom a family room, a patio a garage, but create that environment. So that the audio sounds like you would experience. It. If you were there in the in the concert in the Symphony at the NFL game in the movie Theater right, that's what space.
Speaker Change: Audio or immersive audio is trying to do create that three dimensional audio.
Speaker Change: For the consumer in this picture in the shaded green.
Speaker Change: Yes.
Speaker Change: Demonstrating what they're trying to get to so Dolby has atmos switch is there a mouse MRSA technology, Google has I E. M F, which is their solution next Berry has Dts X all of them are trying to make it easy.
Speaker Change: For you to understand that here all the audio that occurs when you're at that have been there at that movie theater in the NFL Stadium right.
Speaker Change: Above you behind you on the side of it when.
Speaker Change: When you go wireless and not make those speakers wired.
Speaker Change: Then it becomes easier for the consumer to set up and enjoy that immersive audio.
Speaker Change: And that's where we come in.
Brett A. Moyer: We're not publishers, we're not YouTube creating content or Hollywood, we're not the Wi-Fi network, and we're not one of the technology companies that have the decoders, audio decoders for immersive audio. What we are is... We believe the best solution to get that audio from the source device, whether it's a TV, phone, projector, set-top box, to the audio devices in that room, flawlessly, right, with the best sync, the tightest latency, and the most reliable signal. So we are the transport.
Speaker Change: Alright.
Speaker Change: We're not the the publishers, we're not new to creating content or Hollywood, where not Wi Fi network and we're not one of the technology companies that have the decoder audio decoders for immersive audio what we are is we believe the best solution to get that audio.
Speaker Change: The source of ice where there's a T V phone.
Speaker Change: Reject or set top box to the audio devices in that room.
Speaker Change: Flawlessly right with the best sink the tightest latency and the most reliable signal. So we are the transport.
Speaker Change: Second we are the association that make sure that consumers know what products works with who the manufacturer build products that work with each other.
Brett A. Moyer: Second, we are the association that makes sure that consumers know what products work with whom, and manufacturers build products that work with each other. As I mentioned earlier, we have a strong customer base that has used us over the last 10 years. This is a summary of some of the bigger ones, but it's important when you're launching a new technology to not be a new company with a new technology or a well-established company with a killer new technology, which we'll talk more about. All right, so the power of WiSA...
Speaker Change: I mentioned earlier, we have a strong customer base that have used us over the last 10 years.
Speaker Change: This is a summary of some of the bigger ones, but it's important when you're launching a new technology would not be a new company with a new technology, where a well established company with a killer new technology, which we'll talk more about.
Speaker Change: Alright, so the power of voice I E.
Brett A. Moyer: So if you, you would have heard a lot about home theater 5 years ago, 10 years ago, but that's really not the focus, right? The focus is to get that immersive audio on any platform or any room or any area in your house that you want to enjoy audio at and get it from any source. So when you look at the sources that we had at CES, you had two TV companies playing WiSAE. You had two set-top boxes playing WiSAE in our suite and a third set-top box in a private suite. You had a Google phone. You had a Samsung tablet.
Speaker Change: So if you.
Speaker Change: You you would have heard a lot about home theater of five years ago 10 years ago, but that's really not the focus right.
Speaker Change: Our focus is to get that immersive audio in any.
Speaker Change: In any platform or any room for any area in your house that you want to enjoy Audi lot and get it from any source. So when you look at the sources that we have that see yes, you had two TV companies playing wife's I E. You have.
Brett A. Moyer: All of these sources were able to play WiSAE from them to the same speakers in the room. And we think that's important, right? You don't want to have Bluetooth, like with Bluetooth. Fine, that will work with any Bluetooth device, but it won't work with other stuff.
Two set top boxes, playing YC E our suite.
Speaker Change: Third set top box and a private suite you had a Google a phone you had a Samsung tablet all of these sources, we're able to play wise to eat from them to the same speakers into room.
Speaker Change: We think that's important right you don't want to have Bluetooth speakers like with Bluetooth that's fine that will work when your Bluetooth, but it won't work with other stuff. We wanted any wifi enabled device to be able to play with the same speakers in that room, regardless of how it is so that's what we demonstrated at CES.
Brett A. Moyer: We want any Wi-Fi enabled device to be able to play with the same speakers in that room, regardless of how it is set up. So that's what we demonstrated at CES. And that's what, when you look at what we're trying to do, that's how we're going forward. Now, why do we think WiSA-E is so powerful?
Speaker Change: And that's what when you look at what we're trying to do that going forward.
Speaker Change: No.
Speaker Change: Why do we think Weiss it is so powerful.
Brett A. Moyer: Well, historically, we have always had the high-performance audio transceiver, but we have not given that up. But now, with a software solution, we enter the world of universality for technology. So we can implement YCE across all the major SOCs. We demonstrated it on MediaTek, on Amlogic, and on a Qualcomm SOC at CES. We can use different operating systems. Currently, it's Google, but there's no reason that it can't be accepted. We won't expand in the future into webOS or other operating systems, but for now, all resources are going to the Android operating system by Google.
Speaker Change: Historically, we have always had the high performance audio transmission.
Speaker Change: No we have not given out.
Speaker Change: But now with a software solution.
Speaker Change: We crossed into the world of universality for technology vendors. So we can implement YC E across all the major <unk>, we demonstrated on Mediatek on an am logic and Qualcomm out associated yet see yes.
Speaker Change: We can use different operating systems currently at Google, but there's no reason that can't be we won't expand and in the future into Weber, who else are arguably the other operating systems, but for now all resources are going for the Android operating system by Google.
Speaker Change: Finally.
Brett A. Moyer: Finally, we're agnostic to Wi-Fi. You know, we've shown that software can be loaded onto a Realtek and an Expressive chip. One is 2.4 gigahertz, and the other is 5 gigahertz.
Speaker Change: We're agnostic to wildfire, we've shown that our software can be loaded onto a real tech and Unexpressive chip. One is 2.41 as five gigahertz, we can do it on the other ones. So when the when the industry looks at us they know that they have a broad line of Tvs with different S O season.
Brett A. Moyer: We can do it on the other ones. So when the industry looks at us, they know that they have a broad line of TVs with different SOCs in them and different Wi-Fi chips; the same audio products that they designed will work with any other TV regardless of the SFC and the Wi-Fi chip. So that's powerful to them because they only have to design one set of audio products, and they're not constrained going forward on which SoC they choose or which Wi-Fi they choose as they design future generations of TVs, right?
Speaker Change: Wi Fi chips.
Speaker Change: The same product audio products that they design.
Speaker Change: We will work with any other Tvs, regardless of the SFC in the Wi Fi chip.
Speaker Change: That's powerful to them because they only have to design one set of audio products and they're not constrained going forward on which as you'll see that change of which Wi Fi they choose.
Speaker Change: Designing future generations of Tvs right.
Speaker Change: So you've got University reality across our components.
Brett A. Moyer: So you've got universality across the components, and you have it, or are agnostic to device. So for us, again, the consumer needs to be able to have it everywhere, the TV, the mobile, the set-top box, the projector. We've shown it working on all those, and we think, and so we're agnostic to whatever device the consumer wants; we'll roll it out.
Speaker Change: And you got it.
Speaker Change: I'll stick to device so.
Speaker Change: So for US again consumer needs to be able to have it everywhere. The T V. The mobile the set top box a projector we've shown it working on all of those and we think and so were agnostic to whatever device the consumer wants we'll roll it out.
Speaker Change: That's all great technical challenges.
Speaker Change: In our first five months, what we've seen is be able to go in and talk to TV and set top box.
Brett A. Moyer: That's all great technical challenges. In our first five months, what we've seen is being able to go in and talk to TV and set up companies and say, look, this is not going to change your bill of material cost. That's a game changer. Nobody else can go in and say that and be agnostic to device and cross different SOC platforms.
Speaker Change: Companies and say look this is not going to change your bill of material costs. That's a game changer nobody else can go in and say that and be agnostic to device and cross different now Soc platforms.
Brett A. Moyer: That lets the TV guy or a set-top box build in the feature for the consumer and only incur the cost if the consumer wants to buy the audio and trigger the use, right? So, for example, the last, the fifth license we talked about, there's an activation fee. If the consumer buys the audio speakers, then a royalty is paid back. But for the product that isn't attached to audio, there's no bomb cost, which is a big factor for TV and set-top box companies.
Speaker Change: That less the T V guy or a set top box build into feature for the consumer and only incur the costs if the consumer wants to buy the audio and trigger that use right.
Speaker Change: So for example, the last the fifth license, we talked about there's an activation fee of the consumer.
Speaker Change: The audio speakers, then our royalties paid back to us, but for the product that isn't attached to audio Theres no Bom costs, which is a big factor for TV and set top box and phone gotcha.
Speaker Change: And finally, not unique to us but.
Brett A. Moyer: And finally, not unique to us but..., to our strategy, but it has to work in all products, whether it's smartphones, smart speakers, soundbars, subwoofers. That is fundamental. So when we did that press release on universality, that is what we're talking about. We're not giving up our audio performance, but however you want to architect your product, whatever product you want to architect on, we're going to deliver the software to run it, and we're going to make sure that your BOM isn't burdened with costs unless the consumer is using the audio route.
Speaker Change: Two our strategy, but it has to work in all products, whether it's smartphones smart speakers sound bars subwoofers.
Speaker Change: That is fundamental so when we did the press release and universality. That's what we're talking about we're not giving up our audio performance.
Speaker Change: But however, you want to architect your product.
Speaker Change: Product you want to architect on we're going to deliver the software to run it and we will make sure that your bomb isn't burden with Pos unless the consumers using the audio around it.
Speaker Change: Alright, so in those five licenses that are signed.
Brett A. Moyer: All right, so in those five licenses that are signed, the new information on this slide is that there is at least one TV, one set-top box, and one projector in those five licenses. So we've already penetrated three of the market segments, in some cases more than once. And we have guidance later in this presentation that we expect to get at least three more this year to end the year with eight licenses. And all these licenses are with multinational companies.
Speaker Change: No new information on this slide is there is at least one T V. One set top box or one projector in those five licenses. So we've already penetrated three of the market segments.
Speaker Change: In some cases more than once.
And we have guidance later in this presentation that we expect to get at least three more this year to end the year with eight licenses.
Speaker Change: All of these licenses are with multinational companies.
Speaker Change: So we've got a great strategy on technology, we got some licenses go on what's the strategy go to market and make revenue right.
Brett A. Moyer: So we've got a great technology strategy. We've got some licenses going. But what's the strategy to go to market and make revenue? So, we see the TV as the beachhead, and we license to them, start getting speakers around it. But as we demonstrated at CES, it's a quick port into set-top boxes or phones or tablets, right?
Speaker Change: So we see the team he has the beachhead.
Speaker Change: Likes us to then start getting speakers around it but as we demonstrated at CES, just a quick port into set top box or phones or tablets right.
Brett A. Moyer: So, start with the TVs, but we've already moved on into some of the other sets. Now, once the license is in a source device, what's our royalty? or what's our revenue? It's multifaceted.
Speaker Change: So start with the T V's, but we've already moved on into some of the other sectors.
Speaker Change: Once the licenses in our source device, what's our royalty stream or watch our revenue stream.
Speaker Change: Some multifaceted it can be royalties upon activation or a straight license any audio product connecting to it will receive a a module from us and RF module with wisely E. On it. So we make that revenue any customization is engineering services.
Brett A. Moyer: It can be royalties upon activation or a straight license. Any audio product connecting to it will receive a module from us, an RX module with WiSA-E on it. So we make that revenue. Any customization is engineering services, and there will be the capability to have annual support contracts. There are multiple ways to make revenue off of licensing to TVs and other source devices, in addition to selling the RX modules that go into the speakers and soundbars.
Speaker Change: <unk> seized and there'll be a capability to have annual support contracts.
Speaker Change: There's multiple ways to make revenue.
Speaker Change: Off of life testing into the T. V's another source devices. In addition to selling the <unk> modules that go into their speakers and sound bars.
Speaker Change: So what the consumer sees as none of the stuff, we just talked about what the consumer sees as a T V.
Brett A. Moyer: So what the consumer sees is none of the stuff we just talked about. What the consumer sees is a TV. But that TV that has WiSA-E on it gives them a lot of flexibility based on their budget, their use case, the size of the room, and the functionality that the TV implements.
Speaker Change: But that T V. If it has YC E on it gives them a lot of flexibility based on their budget. Their use case the size of the room. So if they want to and the functionality that the team implemented so they want to just do a subwoofer cause teams really had no base. Okay. That's so quick step if they wanted to.
Brett A. Moyer: So if they want to just do a subwoofer because TVs really have no bass, okay, that's a quick step. But if they want to add a couple of rear speakers or front speakers, open up the sound field, you can still do that. All of these things can be done from WiSA-E if the consumer wants to do them, and if the TV supports them. So headphones, sure. Ultimately, there's no reason we shouldn't be able to do that sound, you know, combinations of sound bars and Atmos speakers where you have both forward firing and upfiring audio to get that dome effect of the audio.
A couple rear speakers or front speakers to open up the sound field.
Speaker Change: Still do that all of these architectures.
Speaker Change: Can be done from waste I E. If the consumer wants to do it and if the TV supports it.
Speaker Change: So headphones sure ultimately there's no reason, we shouldn't be able to do that some combinations of sound bars, and Atmos speakers, where you have both forward firing up firing order you don't get that domo sector of the audio that works.
Brett A. Moyer: That works, from an industry configuration point of view. We are seeing a tremendous amount of innovation with TVs in audio. I think this is the first time in 20 or 25 years that I can say that.
Speaker Change: From a industry configuration side, we are seeing a tremendous amount of innovation with Tvs in the audio I think this is the first time in 20 or 25 years that I can say that well, we even see Tvs that are experimenting with prototyping up firing speakers for atmos in the front of the room.
Brett A. Moyer: But we even see TVs that are experimenting with prototyping up-firing speakers for Atmos in the front of the room, which means what's the consumer going to want? They're going to want rear-firing Atmos speakers and subwoofers to complement that great TV. So we think from all the technology we've talked about, the consumer has delivered an easy way to expand and enhance their audio experience around their display device, whether it's held in the hand or on the wall, with WiSAE. All right, we've signed five licenses. We think we're going to sign at least three more this year.
Speaker Change: Which means what's the consumer going to what they're gonna want rear firing utmost atmos speakers and subwoofers to complement that great T V.
Speaker Change: So we think from the all the technology, we've talked about the consumers deliver a easy way to expand and enhance their audio experience around or display device, where there was held in the hand or on the wall.
Speaker Change: With Weiss I E.
Speaker Change: Alright, we've signed five licenses, we think we're going to sign at least three more this year.
Brett A. Moyer: What does that mean to you, the investor? No multinational is going to sign a WiSA e-license unless they've gone through and done their technical test. So that's the first thing it tells you.
Speaker Change: What does that mean to you the investor.
Speaker Change: No multi national is going to sign a wife, they eat a license unless they've gone through and done their tactical tests.
Speaker Change: So that's the first thing it tells you and so in this case it tells US a point in time today.
Brett A. Moyer: So in this case, it tells us at the point in time today how many licenses, so five multinationals have signed off on WiSA Ease performance. Then we go to the license negotiation. These are lists of any of the, some or all of these could show up in that license agreement.
Speaker Change: Five licenses so five multinationals have signed off on why is it ease performance right.
Speaker Change: Then we go to the license negotiation.
Speaker Change: These are a list of any of this some or all of these could show up in that license agreement a royalty rate activation pricing engineering services, and even a speaker module pricing.
Brett A. Moyer: A royalty rate, an activation fee, engineering services, and even speaker module pricing, right? From there, the brands will generally start laying out what their roadmap is. Do they do a high-end product, a low-end product, start with a small, big, or medium rollout?
Speaker Change: Yeah.
Speaker Change: From there the brands will generally.
Speaker Change: Start laying out what their roadmap is do they do a high end product to low end product to start with a small or big or medium rollout all of that has to get decided during between the demo of the technology and the final licensing and beyond right.
Brett A. Moyer: All that has to get decided during, between the demo of the technology and the final licensing and beyond, right? So, sometimes we'll announce a license, and that's the beginning of the process of a brand deciding what to do after they've tested it. Sometimes we'll announce a license, as was the case with the fifth license. We've been working with them and designing with them since the middle of Q4, I believe, but we only got the license finalized in April.
Speaker Change: So sometimes we'll announce a license and that's the beginning of the process of a brand deciding what to do after they tested it.
Speaker Change: Sometimes we will announce the license I just was the case with the fifth.
Speaker Change: License, we've been working with them in designing with them since middle of Q4 I believe what.
Speaker Change: But we only got the licenses finalized in April.
Brett A. Moyer: But at a minimum, you know, we've gone through another multinational's testing and passed when we say we have a signed license. For those trying to build out a model, you can think about a TV having anywhere from single-digit attach rates of audio to 20 or 25 percent.
Speaker Change: But.
Speaker Change: At a minimum you know we've gone through another multi nationals testing and past when we say we have a signed license.
Those trying to build out a model.
You can think about a T V having anywhere from single digit attach rates of audio to 20 or 25%.
Speaker Change: And if.
Brett A. Moyer: And if... They are attaching audio, the minimum is one RX speaker, which would be a subwoofer, but more likely is two to three modules that would be around that team. Under our financial guidance, so from a 24 perspective, as I mentioned earlier, we do expect revenue in the second half from our licensees. We expect to sign three more licensees this year. And we are actually starting to see this quarter our traditional customer, our audiophile customer using WiSA HT, start to reorder, which is a good sign. It means their excess inventory from the COVID cycle of buying and busting is now in line, and they're beginning to drop orders on us. The
Speaker Change: They are attaching audio minimum there's one rx speaker, which would be a subwoofer, but more likely as two to three.
Speaker Change: Modules that would be around that PV.
Speaker Change: Under our financial guidance, so from a 24 perspective as I've mentioned earlier, we do expect revenue in the second half from our licensees, we expect to sign three more licensees this year.
Speaker Change: And we are actually starting to see this quarter, our traditional customer or audio file customer using twice the H T start to reorder, which is a good sign it means their excess inventory from the COVID-19.
Speaker Change: Michael buying and bust is now in line and they're beginning to drop orders on us.
Speaker Change: The.
Brett A. Moyer: Anybody following the company has seen a series of... Fundamentals for us in a couple of regards. First of all, that $8 million is on the balance sheet as of today. That will ensure that we have the cash to properly launch WiSA-E, right, and roll out the new product. Second, building up our shareholder's equity through issuing shares strengthens our application to remain and stay on the NASDAQ listing. We have met the minimum bid.
Speaker Change: Anybody following the company has seen a series of.
Speaker Change: Financings.
Fundamental to before us and a couple regards first of all that $8 million on the balance sheet as of today.
That will ensure that we have the cash to properly launch YC E rate and roll out the new products second in building up our shareholders' equity through issuing shares strengthens our application to remain and stay on the NASDAQ listing we have met the minimum bid.
Brett A. Moyer: Now we just have to comply with net shareholder equity, which we think we've gone a long way towards complying with. And finally, the shareholder meeting, right? Look, if you don't know how to vote your shares, and you're a shareholder of record back in March, you can send an email to info at linusconsultingllc.com, and the proxy solicitor will look you up and tell you how to vote your shares.
Speaker Change: Now we just have to.
Speaker Change: Comply with net shareholder equity, which we think we've gone a long way towards complying with right.
Speaker Change: And finally, the shareholder meeting right.
Speaker Change: Look if you don't know how to vote your shares and you are a shareholder of record back in March you.
Speaker Change: You can send an email to input lining this consulting LLC dot com and the proxy solicitor will look you up and tell you how to vote your shares right.
Brett A. Moyer: It's important we get to 50.1% and have a quorum. So vote yes, vote no, abstain, but vote so we can get to a quorum and do the company's business on your behalf, number one. Proposal number two, I think, is misunderstood. We're asking to drop the quorum threshold from 50% to, I believe, 30% or 33% so that it is easier to execute our business. When you think about most micro-cap stocks or small-cap stocks have a broad base of small shareholders, we are no different.
Speaker Change: It is important we get to 51% and have a quorum so book, yes vote, no or abstain.
Votes. So we can get to the core them in and do the company's business on your behalf number one.
Speaker Change: Hosel number two I think is misunderstood.
Speaker Change: We're asking them to drop the quorum threshold from 15 to I believe 30 or 33%.
Speaker Change: So that is easier.
Speaker Change: To execute our business when.
Speaker Change: When you think about or most microcap stocks or small cap stocks have a broad base of small shareholders. We are no different and I'm no different than all of the U S.
Brett A. Moyer: And I am no different than all you shareholders that look at it. When you have 1,000 shares and you get the proxy statements, the first thing you do is toss them. So, the reason to drop the quorum threshold is so that we can execute the company's business and not spend as much money trying to get to 50.1 percent. Every time we adjourn, every time we do new mailers, every time we do new call-downs, new emails, and print hard copy press, that's a lot of money we've spent over the last six months trying to get stuff approved by the shareholders, and this is for you, to reverse Proposal 1.
Speaker Change: Shareholders that look when you have 1000 shares and you've got the proxy statements first thing you do is toss it.
So the reason to drop the Koran threshold is so that we can.
Speaker Change: Execute the Companys business and not spend as much money trying to get to 51% every time, we adjourn every time, we do new mailers every time, we do new call Downs.
Speaker Change: Emails and press hard copy press that has a lot of money. We've spent over the last six months trying to get stuff approved by the shareholders.
Speaker Change: And this is for you.
The reverse proposal one.
Speaker Change: The board has asked for it is to support.
Brett A. Moyer: The board's asked for it is to support our application with NASDAQ to make sure that we never come back out of compliance with the minimum bid of $1. There's no plan whatsoever to use it right now, but it's to have it on the back burner in case we need it.
Speaker Change: Our application with NASDAQ to make sure that we would ever come back out of compliance with the minimum bid of one dollar.
Speaker Change: There's no plan whatsoever to use it right now, but it has to have on the back burner in case, we need it.
Speaker Change: Finally proposal three and four.
Brett A. Moyer: Finally, Proposals 3 and 4. These are warrants that were issued to the investors. They financed a company during a really tough time between the COVID bust and rolling out YCE and getting licenses done, and this is for their contracts, so we're asking you to approve those as well. So from that, I'd like to ask the shareholder to open up the call to questions. Thank you. We will now begin the question and answer session. To ask a question, you may...
Speaker Change: But these are warrants that were issued to the investors. They finance the company going a really tough time between.
Speaker Change: The Covid bust.
Speaker Change: And rolling out why she didn't have a license is done and this is.
Speaker Change: Or are there contracts. So we're asking you to approve those as well.
Speaker Change: Yeah.
Speaker Change: So from that.
Speaker Change: Like to ask the shareholder to open up the call to questions.
Speaker Change: Thank you we will now begin the question and answer session.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Jack Vandarati of Maxim Group. Please go ahead.
Speaker Change: To ask a question you May Press Star then one on your touch some phone.
Speaker Change: If you're using a speakerphone please pick up your handset before pressing the keys if at any time. Your question has been addressed you would like to withdraw. Your question. Please press Star then two and at this time, well pause momentarily to assemble our roster.
Speaker Change: And the first question will come from Jack Vander <unk> with Maxim Group. Please go ahead.
Speaker Change: Okay, great good morning, Brett Thanks.
Jack Vander Aarde: Okay, great. Good morning, Brett. Thanks for the update. Good morning.
Jason: Sure Jason.
Speaker Change: Good morning, Thanks for taking the time and it's encouraging to hear about the YC E updates and sounds like Youre, making progress on that continued Nasdaq listing.
Brett A. Moyer: Thanks for taking the time and encouraging us to hear about the YCE updates, and sounds like you're making progress on the continued NASDAQ listing. So I'll get started with some questions. In terms of the five signed YCE agreements, and I know you're on track for eight by the end of this year, but it just seems that these existing YCE agreements will be transformative, and that's what I think it's important to note for investors for the income statement, your revenue scale, your margins, really transformative all around based on what I'm hearing.
Speaker Change: Let's start with some questions.
Speaker Change: In terms of the five signed license agreements and I know youre on track for eight.
Speaker Change: By the end of this year, but it just seems that these existing waikiki agreements will be transformative and that's I just think it's important to note for investors for the income statement your revenue scale your margin.
Speaker Change: Transformative all around based on what Im hearing can you just help us understand maybe realistic expectations and the cadence of the maybe the expected revenue ramp.
Brett A. Moyer: Can you just help us understand maybe realistic expectations for the cadence of maybe the expected revenue ramp based on these existing agreements in 2024? Just relatively keeping in mind you just did under 500,000, I think, of revenue in this past year, this recent first quarter. So just juxtapose maybe what these agreements mean for the income statement. Thanks.
Speaker Change: Some of these existing agreements in 2020 for.
Speaker Change: Just relatively keeping in mind you just did about you know under 500000 I think of revenue in.
Speaker Change: This recent first quarter. So just juxtapose, maybe what these agreements mean for the income statement.
Brett A. Moyer: So, we haven't put that guidance out yet, but what I think I can say is... And the only reason we're hedging is that look, all of these are on new projects. So, we have start dates, production dates, all that stuff behind some of the five licenses. The engineering team is heavily involved with three of the five already. But, you know, mass production dates can move around by a month or two. So we said second half, but we should see a couple go out in Q3 to start at least initial shipments on first production runs, and some more come into Q4.
Speaker Change: So we haven't put that guidance out yet, but I think I can say is that the only reason. We're hedging is look all of these are off of new projects.
Speaker Change: So we have start days production days, so all of that stuff behind some of these license some of the five licenses. The engineering team is heavily involved with three of the five already.
Speaker Change: But you know mass production dates.
Speaker Change: Can move around by a month or two so we said second half, but we should see a couple go out in Q3 to start at least initial shipments on our first production runs and some more come into Q4.
Speaker Change: Yeah.
Speaker Change: Okay, Great. That's very helpful color I appreciate that.
Jack Vander Aarde: Okay, great. No, that's a very helpful color.
Speaker Change: And maybe if I can dig a little bit further I'm looking at slide 14, where.
Speaker Change: You outlined the base license agreement and potential revenue streams are associated with it right.
Royalty rates activation pricing engineering services.
Jack Vander Aarde: I appreciate that. And maybe if I can dig a little bit further, I'm looking at slide 14, where you outline the base license agreement and potential revenue streams associated with it. Royalty rates, activation pricing, engineering services, and speaker module pricing. Which of these licensing revenue streams do you expect to commence or begin in the back half of 2024 from your existing agreement? Do they all kind of turn on at the same time, or is there variation across your agreements? Just help us understand these revenue streams. Yeah, right now, you...
Speaker Change: Speaker module pricing.
Speaker Change: Which of these these licensing revenue streams do you expect to commence or begin in the back half of 2024 from your existing agreements.
Speaker Change: So they all kind of turn on at the same time or is there is there a variation across your agreements just help us understand these revenue streams.
Brett A. Moyer: Yeah, right now, each one is fairly different, but engineering services, we had a small amount of that in Q1 already, and the results we reported out should be significantly more in Q2 and Q3, as they prepare to go to market. I think they'll be the first high volume ones to go to market. So, yeah, there are some engineering services that are already in Q1 and should be more in Q2 and Q3 based on the license we have with them, right?
Speaker Change: Yeah, right now each one's fairly.
Speaker Change: Different but engineering services, we had a small amount of that in Q1 already and the results we reported out.
Speaker Change: It should be.
Speaker Change: Significantly more in Q2 and Q3.
Speaker Change: As they prepare to go to market I think there'll be the first high volume when that goes to market.
Speaker Change: So yeah. There is some engineering services are there already in Q1 and should be more in Q2 and Q3 based on.
Speaker Change: The relation the license we have with them right.
Brett A. Moyer: from a royalty perspective. The royalty is baked into the fifth contract, and that one, likewise, should kick in in late Q3 or early Q4. With the other ones, they do not have a royalty. They have a module price, and so when we pick up revenue from them, it'll be based on their launch.
Speaker Change: From a royalty perspective.
Speaker Change: The royalty is baked into the fifth contract.
Speaker Change: And that one.
Speaker Change: Likewise should kick in in late Q3 or early Q4.
Speaker Change: With the other ones are.
Speaker Change: They did not have a royalty they have a module price and so when we pick up revenue from them it will be based on their launches.
Speaker Change: Yeah.
Speaker Change: Got it that's helpful color Brett.
Jack Vander Aarde: Got it. That's helpful, Color Brett.
Speaker Change: And then in terms of maybe just the three I don't know what you can say at this point, but I. Appreciate you did mentioned the three additional whilst the agreements are targeted agreements.
Jack Vander Aarde: And then in terms of maybe just the three, I don't know what you can say at this point, but I appreciate you did mention the three additional YCE agreements or target agreements. Just, just wondering, just relative to these existing five agreements, similar scale, smaller? and maybe royalty, are you still working out the terms of those agreements?
Speaker Change: I'm just just wondering just relative to the existing five agreements similar scale smaller.
Speaker Change: And maybe royalty or you're still working out working out the terms of those agreements.
Brett A. Moyer: Yeah, we're still in the process of working out those terms. They're going to be similar to the ones we have. I would expect them to be primarily in the TV and set-top box market segment.
Speaker Change: Yeah, we're still in the process of working out those terms, they're gonna be similar to the ones that we have I would expect them to be primarily in the TV and set top box market segment.
Speaker Change: Okay, and then maybe just one more for me.
Jack Vander Aarde: OK, and then maybe just one more for me on the balance sheet. You mentioned you strengthened the cash balance. So as of yesterday, it sounds like you had about $8 million in cash. Can we just talk about maybe your expected quarterly OPEX and kind of burn rate for the next couple of quarters?
Speaker Change: On the balance sheet, you mentioned shrinking you strengthened the cash balance so as of yesterday. It sounds like you had about $8 million of cash.
Speaker Change: Can we just talk about maybe your expected quarterly opex and kind of burn rate for the next couple of quarters.
Speaker Change: Yeah. So we've talked in the past about the marketing expenses coming down dramatically.
Brett A. Moyer: Yeah, so we've talked in the past about marketing expenses coming down dramatically. I still think we're in that $900,000 a month range until... on Op-Ed. Now, when you look at our revenue to the extent that we're selling, you know, $100,000, $200,000 of WiSA HT, most of that is in cash. So if you're trying to get to a cash flow, we're selling off a lot of inventory around that revenue.
Speaker Change: Hum.
Speaker Change: I think we're in that 900000.
Speaker Change: A month range until.
Speaker Change: On Opex.
Speaker Change: Now when you look at our revenue to the extent that we're selling.
Speaker Change: 100, $200000. So why is that H T. Most of that is all cash.
Speaker Change: So if you're trying to get to a cash flow.
Speaker Change: We're selling an awful lot of inventory.
Speaker Change: Around that revenue.
Brett: Got it Okay makes sense well good I'm encouraged to see the latest developments here Brett and a.
Jack Vander Aarde: Got it. Okay, makes sense. Um, well, good. I'm encouraged to see the latest developments here, Brett, and, uh, look forward to tracking the story. I'll hop back in the queue. Thanks.
Speaker Change: Look forward to tracking the story I'll hop back in the queue. Thanks Alright.
Brett: Alright. Thanks.
Brett: Again, if you have a question. Please press Star then one our next question will come from Ed Woo with <unk> capital. Please go ahead.
Operator: Again, if you have a question, please press star, then 1. Our next question will come from Ed Wu with Ascendiant Capital. Please go ahead.
Edward Moon Woo: Yeah, congratulations on all the progress. I was wondering, is the WiSA-E an international launch, or will you be focused mainly on the U.S. market? It's an international...
Speaker Change: Yeah. Congratulations on all the progress I was wondering is why is the E on international launch or would you be focused mainly on the U S market.
Brett A. Moyer: It's an international launch. There are, great, no, I mean, there may ultimately be some U.S. licenses. I would expect one or two as we roll this out. But look, all your TV brands, most of your set-top box brands, and manufacturers are international, right?
Speaker Change: Yes, our international launch.
There are great node.
Speaker Change: I mean, there may be ultimately some U S licenses I would expect one or two as we roll this out.
Speaker Change: Political all your T V brands most of your set top box brands and manufacturers are international right.
Speaker Change: Great and well.
Edward Moon Woo: Great. Is your marketing strategy in Europe different than in the U.S. in terms of reaching out to consumers?
Speaker Change: Is your marketing strategy in Europe different than in the U S in terms of reaching out to consumers.
Speaker Change: It's a little different in that we have very different penetration that between the two markets. So the consumers in the U S. No Oh.
Brett A. Moyer: It's a little different in that we have very different penetration between the two markets. So, the consumers in the U.S. know WiSA because of the platen audio brands that we sell, right, more than the Europeans. But the Europeans know more brands because there are quite a few high-end audio brands when you go back to that customer list that have used WiSA HT.
Speaker Change: Wife's.
Speaker Change: Certified because of the Platen audio brands that we sell right more than the Europeans, but the European snow more brands, because there's quite a few high end audio.
Speaker Change: Brands and when you go back to that customer list that have used wise for H T.
Speaker Change: Yeah.
Speaker Change: Great well, thanks for answering my questions and I wish you guys. Good luck.
Edward Moon Woo: Great. Well, thanks for answering my questions. I wish you guys good luck.
Ed Woo: Thanks, Ed.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Mr. Brett Moyer for any closing remarks. Please go ahead Sir.
Brett A. Moyer: This concludes our question and answer session. I would like to turn the conference back over to Mr. Brett Moyer for any closing remarks. Please go ahead, sir.
Brett A. Moyer: Yeah, so I'd like to thank everybody for joining the call. The team is extremely excited about the progress, both technically and with customers in terms of licensing and implementing designs, and we look forward to talking to you in another 90 days.
Brett A. Moyer: Yeah, so I'd like to thank everybody for joining our call. The team is extremely excited about the progress.
Brett A. Moyer: Both technically and with customers in terms of licensing and implementing designs and we look forward to talking to you in another 90 days.
Operator: And with that, we'll end the call. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Brett A. Moyer: And with that we'll end the call.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Music: ??? ?? ?? ?? ?? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Brett A. Moyer: Uh huh.
Brett A. Moyer: [music].
Brett A. Moyer: Yeah.
Brett A. Moyer: Uh huh.
Brett A. Moyer: [music].
Yeah.
Brett A. Moyer: Hum.
Brett A. Moyer:
Brett A. Moyer: [music].
Brett A. Moyer: Yeah.
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Okay.
Brett A. Moyer: Okay.
Brett A. Moyer: Yeah.
Brett A. Moyer: Yeah.
Brett A. Moyer: Hum.
Brett A. Moyer: Yeah.
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Brett A. Moyer: Uh huh.
Brett A. Moyer: [music].
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Brett A. Moyer: Yeah.
Brett A. Moyer: Yeah.
Brett A. Moyer: Yeah.
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Brett A. Moyer: Uh huh.
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Brett A. Moyer: Hum.
Brett A. Moyer: Hum.
Brett A. Moyer: Hum.
Brett A. Moyer: Hum.
Brett A. Moyer: Uh huh.
Brett A. Moyer: [music].
Brett A. Moyer: Yeah.
Brett A. Moyer: Yeah.
Brett A. Moyer: [music].
Brett A. Moyer:
Brett A. Moyer: Yeah.